Owning Real Estate in IRA-Question
Is it possible to own a NNN retail single tenant property partly in your IRA AND partly in your own personal name with cash to avoid financing? It would seem the answer is yes as long as you set it up property and did not pocket any rent in the IRA portion. We use Midland IRA now to own property in our IRA. But property is either in our IRA or we own it outright. We have never combined them. Thank you for any thoughts.
Permalink Submitted by Alan - IRA critic on Mon, 2019-01-21 18:42
The triple net makes it easier to wall off the accounting since the tenant is doing all the repairs, probably names the IRA as additional insured on the commercial insurance, etc. However, you are still a disqualified person with respect to your IRA (see Midland’s website re prohibited transactions). Have you asked Midland about this? The other question is who owns the non IRA part now? You definitely cannot purchase half from your IRA as that is clearly self dealing.
Permalink Submitted by Darrin Boyd on Tue, 2019-01-22 14:36
I have not checked with Midland IRA, I will do that. This property I am interested in is $1.2M owned by an investor I do not know. I dont have $1.2M available in my IRA at this time. But I do have extra cash I could put into the deal on top of IRA money. So I am trying to figure out how to avoid having any debt on the property or other partners while still owning part of the property it in my IRA. I find it hard to believe that it is self dealing if I buy a property half with my own money and half with my self directed IRA.
Permalink Submitted by Alan - IRA critic on Tue, 2019-01-22 15:52
Note that my reference to self dealing referred to purchase from your IRA by you or by your IRA from you. Your last post indicates that you do not plan such a transaction.