Solo 401K for real estate purchase

[JC Conchas]

Hi everyone,

I'm leaning towards opening a solo 401k vs a SDIRA, for buying and holding multifamily properties. But I have a question that I would like answered before I can make a final decision.

My question is, I understand all expenses and rental income go into and out of the account. But, after I buy and hold, which is what I intend to do, how long must I have an account thru the company that sets it up for me. I know the solo 401k account at the bank will be open, because of the income and expenses of the properties. But if I use "xxx401k" company to set it up and all necessary paperwork, will I have to pay the yearly maintenace fee for ever? Even after I buy 5 properties, and am just sitting back collecting rental income.

I didn't find anyone mention this. This would be the final determing factor of a solo 401k vs SDIRA. Paying a few hundred dollars a year for 20 or 30 years? And I assUme the yearly maintenance fees would increase at some point. 

JC

[Dmitriy Fomichenko]

JC,

The benefits of the truly self-directed Solo 401k plan outweigh SDIRA significantly, if you qualify for it. Yes, there will be a nominal annual fee, but comparing with SDIRA you can eliminate all transactions and asset-based fees associated with the IRA custodian. You can have "checkbook control" over your retirement funds, not pay any taxes on leveraged real estate, have greater protection from creditors, more flexibility and control, ability to access up to $50K of your retirement funds prior to retirement tax and penalties free using participant loan feature and more!

Reputable Solo 401k provider will take care of all required plan updates to keep you IRS-compliant and provide all the guidance and support you need. Paying couple hundred dollars a year for a vehicle that can generate millions of dollars for you over next 20+ years is pocket change and would be significantly less compared to IRA custodial account.