What the IRS does stipulate that all activities of the plan must be for the exclusive benefit of the plan beneficiaries.The IRS recommends the following criteria to determine if a plan’s policies are for the exclusive benefit of the plan participants: The cost of an investment must not exceed its fair market value (FMV) at the time of its purchase.A fair return commensurate with the prevailing rate must be provided.The investment must be sufficiently liquid to permit distributions per the plan terms.The safeguards and diversity that a prudent investor would adhere to must be present.So put that in perspective relative to the lending arrangement you are considering.

The best bet is to bring your investors into the deal as LP according to the sponsor PPM returns and fees in exchange for participation in the GP.

You can take participant loans from a Solo 401k, but not an IRA.

Figure out what he actually wants, and if you are okay with that level of participation. 

That the offer is not an offer to invest as much as an offer to show if people would be interested.And the folks in TX and WA cannot participate.

I plan on self-managing all my properties and I thought that would essentially make me an active participant in my soley owned LLC.

I look forward to participating in the forums!

You can participate in just as good of deals with much better terms elsewhere.

I tell them they have to participate and leave it at that.

Compared to an IRA, Solo 401k contribution limits are roughly ten times higher.There is no custodial requirement for the 401k.You don't need the additional expense and administration of an LLC to have checkbook control.There is a built in-Roth component whereas IRAs are either traditional or Roth, not both.A spouse can also participate in the same Solo 401k plan.The Solo 401k has additional tax benefits over an IRA when investing into real estate using leverage.You can borrow from a 401k, but not an IRABoth C-Corps and LLCs can adopt a Solo 401k.