Anyone who can help set up Self Directed IRA (SDIRA)?

Question

I am a newbie investor with 403B of 90K with present employer and 20K from a former employer and would like to invest in real estate using SDRIA. I need help setting this up and have a few questions along with it:

1. Do I need a CPA to set up SDRIA?

2. Can I use funds from my 403B with my current employer?

3. I am hearing about Self Directed 401K with checkbook control, how does this compare to SDRIA?

Thanks in advance!

Account Closed · Answer

@David Kimmel

I have a SDIRA LLC which means I control what my investments are. I set the LLC up with a lawyer first, then i got a custodian that charges me $75 a quarter to hold my LLC. I write the checks, I pay all the bills. No custodian fees except for the quarterly bill. You have to “interview” a lot of custodians to see what custodian works best for you. If you don’t go the LLC route or “checkbook control” the fees from the custodians can eat you alive. You need to educate yourself on prohibited transactions/UBIT/UDFI. All easy to learn but YOU have to learn it before you decide what to do. Solo 401k is another option if you are self employed but i’ll let someone else explain that. Good Luck.

Matt Engle · Answer

@David Kimmel I am familiar with Advanta IRA. Their customer service is very good. All custodians will have fees so it will depend on what you’re goals are when setting up a self-directed IRA. I will be using mine to invest passively in apartment syndications.

Dmitriy Fomichenko · Answer

@Suzanne Player

I see that you are a real estate agent. You are considered to be self-employed and will qualify for truly self-directed Solo 401k plan. With such plan you don't need a custodian or LLC, but get "checkbook control" and eliminate the "middle man" and all custodian/transaction/asset based fees. On top of that it has number of other benefits (such as contribution limits nearly 10X higher, exempt from UBIT on leveraged real estate, access to your retirement funds tax-free via participant loan and more) making it superior vehicle compared to IRA LLC. Are you aware of such option and have you considered it?

Dmitriy Fomichenko · Answer

@Suzanne Player

We use Solera bank as the custodian for IRA LLC, they charge a flat fee of $150/yr.

Sally Fairchild · Answer

@Roushel Asuncion. I used Sense Financial Services to set up my Self Directed IRA.  I highly recommend them.

For your questions, go to their web page.  They have videos explaining everything you want to know about Self Directed IRAs.

Whether you use them or not, the videos will explain the ins and outs of self directed IRAs.

Logan Hassinger · Answer

@Roushel Asuncion

@David Kimmel

I used Safegaurd advisors and @Brian Eastman to setup my checkbook controlled IRA. The custodian is Kingdom trust.

As for moving retirement dollars to another custodian away from your current employer that’s almost unheard of. You won’t be able to rollover to another custodian until you change jobs.

Jennifer Gligoric · Answer

You do not need a CPA to set up a SDIRA, we do these all the time,  though I would recommend you advise with a CPA regarding the restrictions & tax implications of 403B though you should be able to rollover the 403b into the 401k with no issue.

A Solo 401k is only available for self-employed individuals who have no other employees other than their spouse. If you are not self-employed or starting a new business you need to consider the SDIRA.

You can contribute up for 52k a year in a Solo 401k, as well as, much greater flexibility into what you are able to invest in - real estate, precious metals, those are viable investment options which are not offered by traditional plans - hence why this is so valuable for REI's.  An example, instead of using a LLC, if a Solo 401(k) uses a non-recourse business loan to purchase real estate the owner will not have to pay that 40% UBTI tax on any income generated by that property.  There is also no UDFI tax if you leverage to buy real estate with a Solo 401k - but there can be (it depends) with a SDIRA.

A SDIRA, if you are not self-employed or starting a new business, should be structured for REI's as a self-directed IRA owned business trust.  You will need to have a 3rd party custodian and SDIRA custodians can't give financial or investment advice, but having the right structure is important to understand how to avoid UBTI.  Also, with a SDIRA there are three different types of transactions that could fall under the prohibited transaction rules: Direct, Conflict of Interest, and Self-Dealing. You need to be familiar with this as well and work with a company that can help you.We always recommend REI's have a CPA or CFO service to work with, in the end, the right partner there can not just save you money but help you make more money.

Carl Fischer · Answer

@Roushel Asuncion

You don’t need a cpa to setup a SDIRA.

probably very hard to move $$$ from your current employer 403B but ask if you can move any of it to an Ira. Don’t confuse them by mentioning self directed-just say Ira.  The old $20k account should be easy to move

Suzanne Player · Answer

Account Closed $75/quarter with no other fees is good - would you tell us which custodian?

Does anyone have a self-directed IRA (SDIRA) custodian that has especially low fees for just 1 LLC owned property?

Dmitriy Fomichenko · Answer

@Suzanne Player

Solera bank is not be the place to start. They are simply serve as a passive custodian for IRA LLC. You need to work with a facilitator company to get the IRA LLC established properly. The LLC part is very important component, it must be filed correct and IRS-compliant. Have you selected a company already?

Anyone who can help set up Self Directed IRA (SDIRA)?

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