Oftentimes, small business owners who also happen to own the real estate on which their business operates will set up a separate legal entity to own the real estate (the "RealPropertyCo") for a variety of reasons. The operating company (the "OpCo") will then lease the real estate from the RealPropertyCo.

Since the RealPropertyCo and the OpCo have common ownership, the lease is considered a related party / affiliate transaction. My understanding is that under the rules governing ROBS-funded transactions, these sorts of related party / affiliate transactions are not allowed.

QUESTION: What are some ROBS-compliant and tax-efficient structures that folks have used when purchasing businesses together with their real estate holdings?

Thanks in advance for your thoughts / input.