You may find out that it won't work out to be a 50-50 deal as far as work load, one may be doing more work than the other so you may want to distribute the profits differently. 

If you don't, you will be taxed as if you have taken a distribution of the original IRA.

@Alexa Martinelli once you own your properties in an LLC you have to take "distributions" from your LLC.

If rents are in a normal distribution (bell curve) like they should be expected to be then half of the units will be below the average and the other half will be above, you need more information before making a decision. 

To get started I have taken on a partner to help distribute the work load so my full time job does not impede this new endeavor. 

Today, with the big data we have, it is actually quite apparent that the data that is available, is inadequate to derive adjustments in any manner even remotely reliable - real estate data is simply subject to too many variables to pin exact amounts down.

Here is a list of lenders specializing in these types of loans:https://www.biggerpockets.com/member-blogs/2810/50272-list-of-non-recourse-lenders-for-self-directged-ira-and-401kThe proceeds belong to the IRA and can be used to reinvest (buying another property, lending, etc.)There are no tax on borrowed money, but there would be some UBIT tax implications on the income derived from the financed portion of the property.Hope this helps!

We also lost an Amazon.com distribution center about 5 years ago. 

You just need to keep a record of all contributions and distributions in the capital account ledger of each members.

Its simply a mechanism for allocating property distributions and tax attributes in a manner other than a simple pro rata approach.