CPAs will tell you the taxation intricacies

@Darsh PatelHey Darsh: Great question.From an investors perspective based on growth not taxation or asset protectionIf you want the best taxation advise talk to a good accountant or CPA. 

A few thoughts...that need to be verified since the situation is reversed:1) you will likely need to file Canadian income taxes for rent received and later for capital gains when you sell.2) there is a tax treaty between the two countries that intends to avoid double taxation, but you have to watch for situations where it doesn't work.  

A Solo 401k is not subject to this UDFI taxation.

Also I have opened up a LLC and have heard getting s Corp status for the LLC can help some taxation as well.

I have a 10% tax penalty plus income tax at the 25% tax bracket.

I am not sure about a Roth SDIRA, but with other SDIRA, the part borrowed will be subject to UBIT taxation.  

Meaning your entire cashflow+equity can be tax-free recapture-free used in the next property. 1031 sounds great although you'll have to pay Uncle Sam a big tax at the last property. 

You can also specify things like:  "Equity in the property due to mortgage paydown will go to X partner while equity in the property due to market fluctuation will go to Y partner"Essentially, you can split income, deductions and gains in any manner you like, so long as you are cognizant of legal issues like usury laws, foreign taxation, etc.

@Olivia DansereauIf this investor is the same LLC partner you mentioned in your post yesterday, then the transaction is a no-go for reasons of self-dealing with disqualified parties.The Solo 401(k) can lend withing the limits of state usury laws.Typically, a loan for real estate rehab would be 2-3 points and 12-16% interest.If the loan is including a "split of the profits" and an attempt to mask equity share of profits, then the IRS would likely challenge that as subject to UBIT taxation.