What if I want to invest in a large commercial property and I do need support from other parties? Are there ways to simplify the purchase and management of the property?
Yes. Yet another popular approach is for a group of investors to combine forces and invest in an entity such as a limited liability company (e.g., LLC). The LLC can purchase the property. This may be done for a variety of reasons (which will be discussed later), but this approach will allow the LLC to take out a loan. Banks are actually more comfortable loaning to companies than IRAs and, in some cases, people. One of the reasons for this is that the bank can get personal guarantees from some of the members to support the loan for the LLC. For example, it is not a prohibited transaction for an LLC member that is unrelated to any IRA owner to guarantee the loan for the LLC, possibly for a greater percentage of equity for the assumption of the extra risk.
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