Looking to use a self directed IRA for RE investing...which company do you use?

[Adam Demchik]

BP...I am looking to open a self directed IRA. Does anybody have any suggestions on which company I should use?

Thanks in advance!

[Jacob A.]

@Adam Demchik

I spoke to a financial planner buddy of mine and he said on the rare occasion that they have had clients go this route they send them to pensco trust company. I have no reviews or anything for you just a name of a company they use. Hope this helps.

[Aaron Mazzrillo]

Equity Trust Company. I've done all kinds of hairy with them and never an issue.

[Adam Demchik]

Jacob and Aaron...thanks for the tips. Aaron...great podcast by the way.

[Joseph C.]

@adam

I don't invest with a IRA, but have heard good things about Equity Trust from several other investors.

You should be aware that that are certain rules to keep in mind when using a IRA. I am not a CPA or attorney. You may want to seek the advise of a qualified CPA or other professional prior to investing this way.

Attached are some articles that may be hell on this topic.

http://learningcenter.theentrustgroup.com/pages/course/portal.aspx?courseid=331

I hope this is helpful, and good luck.

[Thomas Williamson]

@Adam Demchik I can give you one more company I've used. Guidant Financial.

http://www.guidantfinancial.com/

They handle self directed IRA's and my wife and I used them last year to open up our own 401K in our business. She was able to quit her job, then we took her 401K transferred it into the newly created 401K from Guidant, and then bought more real estate with those funds. They delivered on everything they said they would do. They also provided outstanding legal counsel here in Atlanta for our consultations that were included. Their very big on helping people in our profession.

Good luck either way you go.

[Account Closed]

@Adam Demchik I use IRA Trust Services and can highly recommend. When I was researching this earlier this year, they had the lowest fees which was my main criteria. They have been responsive to my few requests, but I set up an IRA LLC, so I don't have any involvement with them at this point other than the $40 or so quarterly fee.

I had to go back and forth with them some on the form of my LLC operating agreement, so if you want a copy of the agreement they've approved (saving yourself the exorbitant $5,000 or so fee that the attorneys that do this sort of thing charge), send me a PM.

[Daniel Guillermo]

I recently opened an SD IRA with IRA Services Trust Company. The process was quick and smooth.

[Account Closed]

Now that "@Daniel Guillermo" says that, I got the name wrong - I am also with IRA Services Trust Company.

[Curt Smith]

Both my wife and I have moved all our IRAs to Equity Trust and we're buying houses and rehabbing with only minor issues being: takes almost a week to get a check to pay a contractor. Buying a HUD prop has gotten to be impossible because of the HUD asset managers want Earnest within 24 hrs in one case, 48 hrs in the other 2 asset managers case. Equity Trust and probably all other SD-IRA except for check book IRAs can't get a check based on an executed P&S in anything shorter than 1.5 days, which barely makes it for the 48 hr case. So we buy through a wholesaler who tacks on a handling fee in this case. This is a HUD/asset managers created problem.

What's not been said so far is that the lure of the "Check book" SD-IRA has some issues they won't tell you:

- Might be more at risk for IRS audit. Doing prohibited transactions with the ease of a check book is there.

- The main issue is that you can't add more funds, as in a $5k contribution annually, without disolving the LLC funding and re-registering the LLC. If funding once is ok for you, then this won't hit you. Anyone do this step and find it a pain or is this a no big deal?

[Eric Tait]

I can recommend Quest IRA, they have a couple of physical locations in Texas, but they can handle out of state issues as well. They pretty well have the Self directed IRA game locked here in Houston among real estate investors and they also fund twice a day which is helpful if you have some hang up at closing and need to get something straightened out.

[Phil G.]

I'm another satisfied IRA Services client. I invest through an LLC, so my interactions are limited, but transactions are processed in a timely fashion and their fees are reasonable. If you're looking to set up an IRA LLC, I recommend Safeguard (ira123.com).

[Randy King]

Originally posted by @Curt Smith: - The main issue is that you can't add more funds, as in a $5k contribution annually, without disolving the LLC funding and re-registering the LLC. If funding once is ok for you, then this won't hit you. Anyone do this step and find it a pain or is this a no big deal?

"I did not do the quote right."

The Attorney I used to set up my checkbook IRA with IRA Services Trust says that you can add additional funds to your IRA. I have an IRA with Schwab that I transfer money to IRA Services and then they transfer to my checkbook IRA account.

[N/A N/A]

Have not seen MidAtlantic mentioned, but that's who I would have gone with had I elected to purchase property through my Roth. Their price structure was the most advantageous I found.

Recommend reading Tax Free Wealth by Tom Wheelwright to anyone considering acquiring properties with a retirement account.

[Rod Blunk]

We used the IRA Club out of Chicago. Paid a $1300 transfer fee and $200 yearly maintenance and that is it. They set up our LLC and we have the funds easily available in our check book account from our local bank under the name of the LLC. All legal by the tax code. Dennis Blitz is the owner and he worked with congress on getting the laws correct for self directed IRAs. Work for us.

[Doreen Chaisson]

If you have a Single Member LLC owned 100% by your IRA only, you can continue to contribute to or rollover funds into your IRA from other retirement accounts, and then add capital to that LLC as often as you want.

[Andrew S.]

@Adam Demchik

I would think the choice of custodian will depend on what you actually want to do with the funds. I use Equity Trust Co and for my needs, they are OK. That said, I only do simple secured (sometimes unsecured) notes. I don't do actual buy and hold real estate or flips within that account, because there are too many pitfalls and restrictions, in my opinion. It's absolutely POSSIBLE to do many those and many members here do them successfully, but for me its too much hassle. @Jon Holdman

has written many times about this and I totally agree with him

[Dmitriy Fomichenko]

@Adam Demchik

I looked at your profile and see that you are a realtor. That qualifies you for the Solo 401k. You should consider this option over SDIRA. There are several major reasons why it is better, here are few:

1. No need for a custodian - eliminate custodian fees
2. Have checkbook control without the use of an LLC - again savings $$ and simplicity
3. Shelter nearly $50K of your income from taxes (compare that with $5,500 if you use IRA)
4. No UDFI tax on leveraged real estate
5. Access your funds tax free and penalty free before retirement if needed using Participant Loan feature.

and more... Feel free to explore my other posts if you wish to learn more about all the details. This topic has been discussed extensively in the past, educate yourself, ask questions and make informed decision.

BP is a great place to learn about this and many other topics related to real estate investing and there are many helpful people who are glad to assist you!