Closing a Real Estate Transaction

How do you close a property transaction with a title company using an IRA LLC? Well it’s real simple, it’s the LLC that’s purchasing the property, so its name is on all the documents; but you are the manager so you’re going to bring three documents to closing. And those documents are going to be:

The Articles of Organization, which shows the LLC that’s making the purchase, is legal, it’s alive, its dues are paid, it’s in good standing with the state. So that’s the Articles of Organization. You’ll have a copy of those.

You’ll have a Tax ID number or EIN number or TIN number and it goes on any tax returns, you’ll need that for closing we get that for you that’s part of the LLC. It ties the LLC in the IRA together so it gets its special tax treatment.

And then finally, because you are not the owner of the LLC, the IRA is the owner of the LLC, you will have an Operating Agreement. Now that’s an agreement between the owner, the IRA signed by the trustee, and you the manager, agreeing to abide by the operating rules; the things that are listed in the Operating Agreement, what you can do, what you can’t do.

You sign that, they sign that. That’s given to the title company and it shows that you have the authority to sign all the documents on behalf of the LLC. You have written permission right there in front of you signed by the trustee.

So those are the three documents you would need. Remember, all purchases are done in the name of the LLC so you’ll be able to stop by your local account, pick up a cashier’s check to close, or authorize a wire. So closing real estate is real simple checkbook IRA. It’s the LLC doing the purchase.