All Forum Posts by: Jack Okada

@Nathan, you're missing a critical  aspect of what you want to do....

In California, this will trigger a change in ownership and cause the state to reassess your property value as if it was sold; consequently, your property tax is likely to increase. You can transfer up to 50% ownership to your LLC without this occurring.

oh, and the LLC fee in California is $800 per year.

Not a great source, but I'm mobile... https://www.deedclaim.com/cali...

This doesnt apply? Source:https://www.theentrustgroup.co...

See the bit about 50% owner at the bottom...

Question: Who is a disqualified person?

Answer: For the purposes of determining prohibited transactions through your self-directed IRA, the following people are considered disqualified persons:

• You and your spouse
• Your employer
• Your lineal ascendants and descendants, as well as their spouses (children, parents, etc.)
• Any person providing plan-related services (custodians, advisors, fiduciaries, administrators, etc.)
• Any entity (business, corporation, partnership, etc.) of which you are at least 50 percent owner, whether directly or indirectly

To be more specific: the project LLC obtains a first lien on the house through traditional financing. The SDIRA lends working capital to do construction/rehab...so basically a construction loan; when the house is sold, SDIRA gets a balloon payment in the entire balance plus interest.

Been reading a lot about SDIRA and real estate investing, including several posts on BP, but this question I couldn't find an answer to..

Say I form a project LLC with three friends to flip a house. The ownership is split based on our capital contributions, 33% each.

Can my SDIRA LLC lend money to the project LLC without any issue? I read in a few places that there is an issue if I'm a 50% or greater owner in the project LLC that the SDIRA is lending to. Will being a minority owner make this scenario OK?

TIA!