ForumsReal Estate InvestmentsFunding Real Estate Deal

Forums Solo 401k Real Estate Investments Funding Real Estate Deal

  • Funding Real Estate Deal

    George Blower replied 1 year ago 2 Members · 2 Posts
  • 1 Reply
  • Top SubjectReal Estate Investments
    Top ForumsReal Estate Investments

    Rich D.
    Top SubjectReal Estate Investments

    May 31, 2023 at 8:26 am

    A friend of mine is buying a piece of vacant land to flip. I’d like to fund the deal with my Solo 401k. This would be a strict funding deal with a 50/50 split of the profits and my Solo 401k will not take ownership of the property. How does the process work as far as getting the money to the Title Company. What forms would I need? Once the property sells, can I take the principle and profit back in the form of a check from my friend or does it have to come from the Title Company?

    Rich D.
  • George Blower

    Top SubjectDaily Live Webinar,Solo 401k
    Top ForumsDaily Live Webinar, Solo 401k

    George Blower

    George Blower

    Top SubjectDaily Live Webinar,Solo 401k

    May 31, 2023 at 5:38 pm

    Provided that one has a solo 401k (like our plan) that allows for investing in alternative investments, one may certainly invest in such investments subject to the Solo 401k investment rules (e.g. the investment does not constitute a prohibited transaction such as buying property from a disqualified person, does not include a prohibited use such as using the property for personal use, etc.) and that the investment is made under the name and EIN of the Solo 401k. While it is not necessary for the Solo 401k to take title to the property if the investment is structured as a secured debt investment, the investment would still need to be titled under the name of the solo 401k (e.g. promissory note payable to the Solo 401k) and on arms’ length terms with such terms documented in the investment agreement (e.g. repayment terms, any security interest documented and perfected, etc.).

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