Who is your self directed IRA through?

Question

I have been researching companies to open up a sdira through, please share pro's and con's? Have anyone heard of rocketdollar?

Mark S. · Answer

Make sure you understand prohibited transactions, as your post implies you’re hands on with your properties. If that’s the case, the SD IRA route may not be for you.

Mitch Messer · Answer

Hi @Natelya G. My SDIRA is currently with Equity Trust, but I'm familiar with many of the larger custodians. Not familiar with Rocket Dollar, but Google tells me they were formed just last year (2018). I'd probably want a bit more seasoning than that, personally.

Ultimately, the ideal one for you is going to provide you with the customer support and client portal that best serve your needs, along with a fee structure aligned with your investment style so you don't get bled dry one dollar at a time.

As an aside, since you are in Georgia you should give strong consideration to the SDIRA training offered in Atlanta by Dyches Boddiford and Pete Fortunato in March 2020!

For the record, I receive ZERO compensation for this referral. I'm just a satisfied client!

Taylor L. · Answer

Mine is currently through Quest Trust. They're helpful and do a good job. As long as you know the ins and outs of the rules around SDIRAs, you should be good.

Mark S. · Answer

@Natelya G., I use IRA Services Trust Company (ISTC).  They’ve been pretty good so far.  I also like that they’ve been around a while.

I think the ongoing fees are fair, but they do seem to have a lot of nickel and dime fees for every little thing. Other custodians seem to charge higher ongoing fees and not so many nickel and dime fees.

I am a passive investor and use my account to own international agricultural real estate investments that pay annual profit distributions to my account.  Since the initial transaction and annual profit reinvestments are the only activity in my account, their fee structure works well for me.

If I was going to be more active, had multiple transactions per month going in/out of the account, etc., I’d probably look elsewhere.

George Blower · Answer

@Natelya G.

Here are some issues to consider in choosing an Self-directed IRA provider:

1. In order to have checkbook control, the IRA account will need to be at a trust company that will allow the IRA to invest in an LLC (where you will be the manager and your IRA will be member - an as manager you will have checkbook access to the LLC bank account). Therefore, you will want to confirm that the trust company allows for investing in an LLC and the associated fees and minimum balance that applies to the IRA account.

2. Confirm that the IRA LLC provider will prepare all of the documents needed to not only form the LLC (articles of organization, SS-4 to obtain an EIN) but also the documents needed by the trust company to process the investment of IRA funds in the LLC.

3. Confirm that the provider has experience with the particular investments in which you intend to invest your retirement funds as you very likely will have questions in terms of the mechanics (e.g. how do you invest in real estate, etc.).

4. Confirm that the provider has a pristine reputation (e.g. Better Business Bureau reviews, etc.).

5. In addition, if you are self-employed with no full-time employees you may wish to consider opening a Solo 401k instead of a self-directed IRA as it has several advantages over an IRA LLC such as much higher contribution limits, direct checkbook control (i.e. no need to have the account at a specialty trust company), ability to take a 401k loan, exclusion from unrelated debt finance income tax with respect to investment in real estate acquired with non-recourse financing, etc.

In addition, please note if you purchase debt-financed real estate with your IRA, unrelated debt finance income tax should apply to the income attributable to debt-financed real estate held by your IRA. Of course, you will want to review your specific situation with your tax advisor.

John Fortes · Answer

I know Dan Kryzanowski of Rocket Dollar and recorded a podcast episode with him as well. I met him at Michael Blanks event last July.

There are many others that everyone else is mentioning here as well. Just take your time and interview each custodian, learn about their fees, process, online access, processes, ect. Goal is to make sure which company can provide you with the smoothest transaction process with a product that suits your needs as well as low fees. What I mean about transaction process is the process it takes to get your capital to fund a deal/opportunity/investment. I'm sure the rollover process is just about the same for all custodians.

Steven Taylor · Answer

@Natelya G.

I have been using Equity Trust for many years and love them and there website is very easy to use. They are from my hometown of Cleveland. Yet I have never been to there office. I own a property management company here in Cleveland and many of my owners use them. Never heard a bad thing

Natelya G. · Answer

@Nick Brown

Thanks Nick, I will check it out.

Natelya G. · Answer

@Logan Hassinger

Thanks Logan, the ongoing fees seem much more important to me than the upfront costs.

Natelya G. · Answer

@Mark S.

Thanks for the information.  I plan to use this account more actively as we buy and hold SFH and duplexes.  I need to get a better handle on the fees structure as it seems I will be extremely affected by it.

Who is your self directed IRA through?

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