Sole proprietor who is a real estate broker wants to buy residential property and rent it out until some alleged future day when it is worth much more, then sell it.

1. Can a plan get a mortgage to buy this investment property.

2. Is the plan exempt from ubit?

3. Could the trustee (also the sponsor and participant) sign personally for the mortgage.

1 & 2. If you get a mortgage (leveraging the purchase), you will have UBTI.

3. TEE signing personally mortgage = PT.

Also, if the property is more than 5% of the plan's assets, you'll blow the small employer exemption from the annual, independent audit requirement.