Self Directed IRAs for RE Investing Recommendations

[Melissa Shimmin]

Looking for recommendations for companies/institutions offering IRAs in which to rollover my 401K so that I can use the funds to invest in Real Estate. I'm looking at Entrust Group. Does anyone have experience with them? Other recommendations? Companies to stay away from? Thanks! Melissa

[Brian Eastman]

@Melissa Shimmin

The company you choose to work with will depend on the nature of your investments and the type of plan you feel will best suit your needs.

IRA Custodians such a Entrust are 3rd party processors and record keepers. The hold an IRA much like a conventional brokerage would, but have the staff training and paperwork to document the more individualized types of transactions that occur in non-traditional assets such as real estate, notes, private stock, etc.

With a custodian held IRA, they are the processing layer. To get anything done, you must send instructions for them to process, and everything takes between 2-5 days depending on the institution.

Alternately, you could look at a checkbook IRA LLC or Solo 401k plan. These plans put you directly in control of the funds and eliminate the paperwork, delays and per-transaction fees common of most custodians. These plans are offered by consulting and/or legal firms and not directly by custodians. For more time sensitive and transaction intense assets like direct ownership of real property, these plans are typically the better tool for the job. The cost more to setup initially, but have reduced operating costs in the future. More importantly, the actually allow you to get things done.