SD IRA: Minimum investment to make it worth the expense

[Drew M.]

I have an orphaned Roth IRA that I can't really do much with. There is a limited amount of money in it right now (let's say $10k for discussion purposes) and I don't expect to contribute more. I am considering going with a self-directed IRA and using the money to play with"alternative" investments such as tax lien certificates, distressed notes, etc. I am concerned that between the startup fees charged by an SD IRA custodian, the costs of forming an LLC (for checkbook control), and the annual fees for both that it will not be worthwhile.

My motivation is not so much to make big buck$$$ but I still don't want to just bleed the principal away on fees. Any comments or thoughts? Has anyone gone to a self-directed IRA with a small amount of principal?