Partnering Your Self-Directed IRA Funds
to Invest in Real Estate

If your IRA does not have enough cash to purchase the investment asset you are interested in, you could consider bridging the gap in a few different scenarios:

1. Partner your IRA’s funds with your personal funds. For example, your IRA can own 50 percent and you personally can own 50 percent, which would make you tenants in common.

2. Partner IRA funds with funds you personally guarantee, like a home equity line of credit.

3. Your self-directed IRA may also partner with someone else’s personal or IRA funds.  Please note: The disqualified persons rule may not apply when partnering with someone’s IRA funds since you are not personally transacting with the individual.  Therefore, it is possible to partner with your spouse, parent, or child.

When you partner funds for real estate investing, ownership is assigned by the percentage of funds each partner contributed to the purchase price. For example, if your IRA purchased 60 percent of the investment and a partner contributed 40 percent, your IRA receives 60 percent of all income and is responsible for 60 percent of the expenses. The partner’s income and expenses are based on their 40 percent stake in the investment.

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Best Practices of Investing in Real Estate with an IRA