Self Directed checkbook IRA recommendations?

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@Austin DavisThere are many administrators and custodians that administer checkbook IRA's and LLC. There is a list from bigger pockets available at this link. I recommend you do some research on different administrators and custodians and call up the top couple and find out which one will suit your needs best. Not all custodians and administrators offer the checkbook IRA/LLC, so that should be your first question. I would also recommend you find out about their fees and the process to make the investment.So here is a very simplified list of steps. Keep in mind some of these can be done at the same time as other steps.1. Research and find your new SDIRA administrator or custodian2. Open the new SDIRA - talk with your advisor if you are not sure which type of IRA is best for you (traditional, Roth, SEP, SIMPLE...etc)3. Fund the new account - Contribution, transfer and rollover are your options to get the funds into the new account. 4. Get the LLC established. I always recommend you work with an attorney who is knowledgeable of SDIRA's and Checkbook IRA/LLC's. You will also need to establish a bank account for the LLC.5. Once the LLC is established correctly and the account is funded, follow your new administrator/custodians process for making the investment. Usually it is a form (online or pdf) that you complete and then you send in the additional LLC documentation and the IRA will disperse the requested amount to the LLC.6. I also recommend you work with a professional like an accountant or attorney to make sure the ongoing transactions within the LLC remain within the IRS rules and regulations. They can ensure you avoid any prohibited transactions.

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1) As to @Jane Blake's point about "I understand them are that you cannot profit in the IRA from a close relative" I dont think that is quite accurate. How is was explained to me at one point is to think of it as a family tree and do this.... Draw a cross on a piece of paper. You are at the intersection. Above you is your parents, grand parents etc... Below you is kids, grand kids, etc.... to left and right are brothers, sisters, uncles, aunts, cousins, etc.... It is the "up and down ones you cant do business with". The ones to "the sides" are fine to do business with. If I am mistaken hopefully one of the pros can chime in. 2) As to @Jeff S. comment of "why would you place your money with a custodian" in my/our case I think it was the only option. What I mean is that with having rentals there is NO way I would do it with having to go through having a custodian cut every check etc.... To *me* checkbook control is the ONLY way to do rentals if you are self managing. 3) As to "who to use" I use @Dmitriy Fomichenko at Sense Financial. I would recommend him or one of the other providers who contribute here on BP such as @Carl Fischer, @Brian Eastman or others who so willingly share their knowledge. I contacted each of them and some of the "Big Boys" and felt I would get better more personal service from any of them compared to the larger companies. Dan Dietz

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@Austin Davis I went through this same process and setup with a company that does NOT have checkbook control. I wish I had gone with one that does have checkbook control. So that is what I usually recommend to others, get checkbook control!

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For IRA's, @Austin Davis, there are custodians and there are administrators. By law, all IRA funds must be held by a custodian. Depending upon whether they are a bank or a trust company, custodians are heavily regulated by the IRS, DOL, and possibly the FDIC, State Banking Commissioner, and the Comptroller of the Currency. Administrators are not subject to any such scrutiny and are really just middleman. An administrator will pass your funds to a custodian, provide statements, and hopefully help you stay within the law when you invest your IRA funds. Custodians do exactly the same thing but with the added regulatory and financial scrutiny. Why would you place your money with an administrator? Maybe not perfect, but you can tell if you are dealing with a custodian rather than an administrator because they will usually have the word "Trust" in their name or they will be a bank or brokerage. If it's not clear to you, then ask. And if you don't think that it matters, take a look at what happened to those that placed their IRA funds with American Pension Services, an administrator. Then there are fees, which is how these firms make their money. Some IRA custodians charge by the transaction, some charge by the total value of your account, and some by both. All publish their fees so you can use a spreadsheet to determine the lowest cost solution. This will obviously be personal and depend on your available cash and investment strategy. For example, if you are flipping houses and have a lot of relatively small dollar transactions, then pick a company that charges by the value of your account. If you expect to do relatively few higher dollar transactions, such as lending money, you might pick one that charges by the deal, etc. What works for me, might not work for you, so be careful when others recommend a specific company. Note too that since these firms are federally regulated, it doesn't matter what state they are in. You don’t need anyone local since you will never visit your IRA custodian. (And as a complete aside, if your brother qualifies, an SD 401k is the better way to go.) Last is service, which really only comes from experience and reputation. After you’ve narrowed your search, you might post a few names here asking about their service. Also, ask around at some of your local real estate clubs. Choosing an SD IRA custodian is not difficult and it should not be agonizing. It involves a bit more work however, than simply asking for a recommendation.Best of luck to you and your brother, Austin.

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Hey Austin, I'm out of DSM and I've done some SD IRA investing. I used Quest which is out of Texas and have been very happy with them. I did look locally, but didn't seem like there was a company that fully understood the SD IRA and how to keep me compliant. Before I started I did the research and education, but working with Quest has done a great job asking the question I didn't know to ask.

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I use Quest and they are a good company, but they do not give you checkbook control. Rocket Dollar is another local company that does give checkbook control, and has simpler billing. However, they did suffer from a data breach recently, so you may want to see what they've done to safeguard against that in the future.

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sent you a request,

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@Jeff S. I see I did misquote you, sorry about that.When I was searching for a provider the custodians that I contacted (I must not have searched far enough) did NOT offer the LLC/Checkbook model. I only found administrators to do that. I think what you are saying is that there are both models out there willing to do that? If so, that is good to know. With that being said, I have been extremely happy with my provider who is an administrator. Dan Dietz

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"2) As to @Jeff S. comment of "why would you place your money with a custodian" in my/our case I think it was the only option. What I mean is that with having rentals there is NO way I would do it with having to go through having a custodian cut every check etc.... To *me* checkbook control is the ONLY way to do rentals if you are self managing."I think you misread my post @Daniel Dietz, and you misquoted me. To clarify, I did not question going with a custodian. I questioned going with an administrator since they are unregulated middlemen who must ultimately use a custodian anyway. Subject to the rules of the individual company, you can set up an IRA LLC with either an administrator or a custodian and avoid the per check fees by cutting the checks yourself. If you're managing rentals, as you know, this is obviously the low cost way to go. In the case of loaning money, with relatively few checks (really wire transfers), and the extra reporting requirements, the LLC might not matter.

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I may be mistaken on my previous post so I would suggest a professional on this arena