Thanks True for the tounge in cheek feedback. Getting sued by other investors won't be a problem because there won't be any.
The attorney I spoke to identified the risk that the IRS might declare the investment to be a prohibited transaction, and thereby an early withdrawal -- thereby making it taxable with penalities. Jail wasn't mentioned as a possible outcome. The research suggested by the attorney is (a) to determine if this is feasible and (b) if it is feasible, to determine how to structure the deal to prevent any negative outcomes.
I know you can buy real estate with an IRA, so it seems logical to me that you can invest in a business. I think the gray area is in investing in business that you control.
One of the companies that I spoke to is Mid Ohio Securities (
www.midoh.com). I got the same story from another company (which I didn't bookmark -- try Google).
If I decide to pay the $ to get the professional opinion I'll post results.
Your other idea regarding the Private Investor is interesting, but I fear an investor would exert a degree of control I couldn't live with (I aleady have a boss, I don't want a new one). Plus they have a nasty habit of wanting an ROI on their investment…
The bank loan might turn out to be the best route... but I don't want to leave any stone unturned.
Thx!