QUESTION:
I invested my self-directed 401k in a joint venture with an unrelated investor (i.e., not a family member or myself). My 401k owns 50% and the other investor owns the other 50% of the real estate property. Is this an allowed solo 401k investment type?
ANSWER:
I understand that the Solo 401k has invested in a real estate investment via a joint venture with an unrelated person where the property is held via a tenancy in common with a 50% ownership interest held by the Solo 401k and a 50% ownership interest held by the unrelated person. Yes the self-directed 401k investment rules allow for this type of real estate joint venture investment provided that the terms of the joint venture are arms' length and fair market terms which are documented in a joint venture agreement between the Solo 401k and the unrelated third party (along with other terms of the transaction such as the cash that the parties are to invest, the responsibility of the partner, etc.).
I invested my self-directed 401k in a joint venture with an unrelated investor (i.e., not a family member or myself). My 401k owns 50% and the other investor owns the other 50% of the real estate property. Is this an allowed solo 401k investment type?
ANSWER:
I understand that the Solo 401k has invested in a real estate investment via a joint venture with an unrelated person where the property is held via a tenancy in common with a 50% ownership interest held by the Solo 401k and a 50% ownership interest held by the unrelated person. Yes the self-directed 401k investment rules allow for this type of real estate joint venture investment provided that the terms of the joint venture are arms' length and fair market terms which are documented in a joint venture agreement between the Solo 401k and the unrelated third party (along with other terms of the transaction such as the cash that the parties are to invest, the responsibility of the partner, etc.).
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