My goal is to be able to fund the max I can into the ROTH Solo 401K every year. I would like to eventually purchase real estate with the 401K as an investment, but I understand that this requires non-recourse funding which can be difficult to obtain and a bit expensive. As an alternative, am I allowed to invest into another LLC that I start which purchases the real estate using conventional financing?
ANSWER:
The only loan a Solo 401k can obtain to purchase / invest in Real Estate is a a non-recourse loan. The self-directed solo 401k owner cannot invest the Solo 401k into an LLC you he owns to obtain conventional financing as that would be a prohibited transaction. The solo 401k owner is prohibited from personally guarantee any loans to the Solo 401k plan whether a pretax solo 401k or a Roth solo 401k.