All Forum Posts by: Jim Bentley

I've completed the purchase of my first property, fully paid in cash, through my LLC in my SDIRA, and I have it rented. I now want to purchase another property, but this one I want to finance with about 30% down and a mortgage on the rest. I talked to a banker this morning to get details on how to do it, and she wasn't sure - she said that normally, a purchaser buys the property in his own name, and then transfers it to the LLC. She didn't believe that I could get a loan with their investors directly through the LLC. She fully understands that I can't co-mingle my money with the LLC, but isn't sure how to accomplish it, although she's checking. This is a local bank which has always worked well with me.

How do others with SDIRA/LLC's handle getting a loan for a rental property?

Thanks; that makes sense.

- A landlord can't refuse to rent to someone just because he's handicapped (obvious)
- If a handicapped renter wants to add handicap accomodations, the landlord can't refuse, but the landlord doesn't have to pay.

Unfortunately, the commercials the government is running aren't very clear, and even make it sound like the landlord is financially responsible for making the accomodations.

The government is running radio ads locally to let renters know that they can't be discriminated against. The ads are basically little 8 second audio skits ("Once we showed up to look at the property, and the landlord saw our race, the property was suddenly not available." ... "When the landlord heard that I was single with 5 kids, he said he wouldn't rent to me" ... etc.). The ad ends by telling renters to contact some federal agency if they feel they've been discriminated against.

I don't have any problem with those scenarios, but one skit had a wheelchair-bound man complaining that he couldn't find a rental, because none of them were handicap-accessible (stairs, no ramps, narrow hallways).

I understand that if I refuse to rent to somebody because of their race or familial status, I can get sued, and I will probably lose. Is lack of handicap access also grounds for a discrimination lawsuit? Is it going to get to the point where we have to provide wheelchair ramps/bath bars/etc. upon request?

@Kelly
Thanks for the reply. I'm worried that the IRS will it as my IRA profiting from my personal assets. I remember reading one post a while back from someone saying that he won't even purchase rental property for his IRA in the same neighborhood as his personal residence because the IRS will regard that as using his IRA to increase property value in his personal residence.

I'm getting ready to close on my first investment house purchased by my SD IRA. My personal insurance agency gives a discount of 10-15% on my insurance policy because I have multiple, personal (homeowners/auto/umbrella) policies at the same agency.

If I insure this rental with my current agent, I'll get this discount on the policy, even though the policy is held by my LLC. Will this discount be regarded as a no-no by the IRS?

@JScott:

That's what I thought, but 4975 says

"(6) Member of family
For purposes of paragraph (2)(F), the family of any individual shall include his spouse, ancestor, lineal descendant, and any spouse of a lineal descendant."

To me, that looks like it's my ancestors and lineal descendants, but it doesn't specify those of my spouse. A lineal descendant of me seems to only apply to those directly within my bloodline, and not those of my spouse.

Again, it seems to good to be true, but if it's not in the IRS code, then it seems like it would be fair game.

Thanks for the info provided to my previous questions; it's been a big help. I have a couple more questions about self-directed IRA/LLCs.

- It looks like my wife's parents are not defined as disqualified persons; sons-in-law are disqualified, but not fathers-in-law. Is this correct? If so, would there be any issues with using my father-in-law as a property manager? He's been doing his own rentals for 50 years, and he's a licensed electrician. I know he does quality work, I can trust him, and I'd just as soon pay him as a stranger.

- The rules allow for gold American Eagles as a valid investment. Is it legal for my LLC to purchase these, and for me to physically retain possession (in a safe deposit box)?

- Similar to the American Eagle question, if my LLC purchases a physical item as an investment and then resells it at a profit, are there any problems with doing so? (e.g. I found an AR-15 at a local gun dealer for $1500 yesterday; I know I could resell that particular model for twice that.)

My impression is that the all three of these are legal, but they seem to be veering into 'to-good-to-be-true territory.

This question came up from reading http://www.biggerpockets.com/renewsblog/2013/01/27/tenant-screening/ on this site:

In that article, it advises landlords to check out a potential tenant's appearance, attitude, car, etc.

If I have a potential tenant who passes all of the checks (background/credit/previous landlords/etc.), but I don't like his looks (e.g. he looks like a creep, has a bad attitude, and his girlfriend has bruises, which I suspect he gave her) how can I legally refuse to rent to him?

That's true, but I have a limited set of 'skills' - things that I do around my own house - like snaking, changing furnace filters, repairing window screens, repainting walls after a tenant leaves, etc., that I thought I'd be able to do in a rental unit (and would do, if it wasn't tied up in an LLC/IRA). Before today, I'd assumed that I'd be able to do so, but apparently not.

Thanks for the information.

Regarding your comments about sweat equity, are you meaning that I can't provide services and pay myself out of the IRA, or I can't do anything, period?

For example, if a tenant calls complaining of a stopped-up kitchen drain, can I just run over and snake it, without any compensation, or do I actually have to call a plumber and pay him for a service call?