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Solo 401k and Tenants in Common Transaction

A Solo 401k can invest in real estate in three ways:

  1. Outright purchase;
  2. Use of leverage (non-recourse loan); or
  3. Tenants in Common (TIC)

We will discuss TIC and the other two methods in future blog postings.

Under tenants in Common (TIC), the Solo 401k and the Solo 401k owner can co-invest  when purchasing real estate.  Therefore, each party's ownership percentage in the property must be separately reflected on the recorded deed.

Here's is an example:

EXAMPLE : 50/50 split between Jane Doe and his Solo 401k ("Doe Solo 401k Trust")

How REAL ESTATE deed is recorded: Jane Doe, an undivided 50% interest and "Doe Solo 401k Trust, an undivided 50% interest.

Important items to keep in-mind under Solo 401k TIC Transaction:

  • No debt financing can be brought to the table by the Solo 401k or the Solo 401k owner.
  • Profits and expenses are split according to ownership percentages.

To learn more about investing your Solo 401k in real estate visit or call 800-489-7571.

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Comment by Realty411 Magazine on November 19, 2012 at 6:18pm

Thank you for your blog, we are promoting it on social media!

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