It looks like he needs to either 1) set up a new LLC and make the SDIRA the only member, or 2) add the SDIRA as a member to his existing LLC.If he sets it up as part of his existing LLC, he runs the risk of committing self-dealing infractions, which would invalidate the IRA, resulting in expensive tax and penalty consequences.Either way, it looks like someone else has to be the administrator, or maybe I am not using the correct term.Yes, a 3rd party administrator is required.Also, does the SDIRA get all the profit from the rentals, or can it be split 50% between the SDIRA and the existing LLC?All income from the property must remain in the IRA, or it is considered a withdrawal, with associated taxes and penalties. All expenses (initial purchase, property taxes, insurance premiums and deductibles, repairs, maintainence, any utilities not paid by the tenant, HOA fees, special assessments, etc.) for the property must be funded from only the IRA.Because IRAs are not allowed to take out loans with recourse, it is unlikely that he will be able to use a loan to purchase property - the IRA would need to fund the entire purchase price.AJ
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