Self Directed IRA is hard to find!!!!!

19 Replies

I'm in New Jersey and have a check from another IRA that needs to be rolled over ASAP. I want to start a self-directed IRA but cant find a financial institution that has them available for real estate investing. Tried TD Ameritrade,Wells Fargo, and a local community bank. Anyone know which financial institutions are handling SD IRA's?

Equity Trust in Elyria, Ohio

Lincoln Trust in Denver

Pensco in San Francisco

UDirect IRA in Tustin, CA

Are a few I have dealt with.  Go with a well established bigger outfit may be best.  I had funds with First Pension in LA, a small private boutique provider with great customer service, when they went belly up and stole $60M of investor funds.   I lost $14k cash account, a friend just had a mortgage payoff and had $200k swept.  Ouch.  Fifteen? years ago and it still hurts.  Good luck. 

@Fred Canzano

Self-directed IRA accounts are a specialty service, not served by the mainstream brokerage houses.

There are several types of account structures, and what will be best for you will depend a lot on variables such as the amount of capital, investment types, your employment status, etc.  

I would suggest that you park that money by depositing it into a regular IRA at your local bank. You only have 60 days from the initial distribution to deposit that money, and failure to do so would be catastrophic to the IRA and taxable.

Then, take your time and learn more about self-directed IRA plans and how they line up with your goals. There are several providers of such plans active here on BP sharing their expertise, and a ton of great posts on the topic. There is no need to rush your decision just because you have to find a home for that money. Once you have a plan in place, you can then easily move it from wherever you park it for the short term.

Quest IRA out of TX

CamaPlan out of PA

NuView out of FL

@Fred Canzano

IRA Services Trust Company is very reputable and have been in business since the late 70s. They are one of the top self-directed IRA providers.

@Fred Canzano

I agree very strongly with @Brian Eastman do not rush this decision as it is an important one, you want a custodian that you trust, however be sure to have those funds deposited into a qualified account before your 60 days are up.

In terms of custodians, here are some things to consider.

1. Fees, this is important but I would not say it is the most important thing to consider

2. Speed, you want a custodian that has a quick processing time period

3. Reachable, do you really want to have an automated phone promt system that takes 30 minutes to get to a real person, or do you want to have the phone answered by a real person

4. Customer Service, you want a custodian that will listen to your needs and be able to help assist you with kindness

5. Knowledge, you want a custodian that knows what they are doing and can help explain the rules and prohibited transactions to you

Brian Eastman IRA123 is great

Thanks for all of the responses, they were very helpful. I did roll the check back into an IRA, for now and I am currently seeking out a self directed IRA that can be of use in the future.

I still want to learn a few things about the self directed IRA.

1- Can I use this fund to purchase rentals that I plan on holding onto for long term? (Are some self directed plans different from others)

2-If so, how much of the money borrowed would I be required to place back into the fund? Is there a time frame and payment schedule attached?

3- Can a business partner, whom is not a family member, borrow from my Self Directed IRA if its a flip project we are doing together?

I have seen this work well in partnerships by creating an LLC that the investing entities all become members of. It is my understanding that self directed IRAs have the flexibility to do a multitude of things in real estate. The main component is that it has to be propotional. So, if your Self Directed IRA is 75% partner with another entity, then it must collect 75% of the profit (rental income, sold gains, etc), it must also contribute 75% of the expenses (rehab, insurance, taxes, etc).

I am not sure about loaning to a partner. I know there has to be no connection from the IRA to the investment (relatives). And any loans need to be non-recourse. However, I am not sure about the IRA loaning money. That would be a good question for the custodian that you choose.

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@Fred Canzano

It really is time for you to get off the internet and onto the phone with a plan professional and your tax advisor.  Your questions indicate you are very far from even a basic understanding of this topic.  That is totally fine as obviously this is entirely new to you, but you can choose to chip away on the internet and lead yourself on a long and not entirely well directed chase, or you can get to the point.  Please don't take that wrong, just trying to help you save time and eliminate risk of misunderstanding.

While services differ somewhat, all self-directed plans are governed by the same rules outlined in the tax code. In fact, all IRA's are governed by such rules, but when your investments are within the very narrow box offered by a conventional Wall St. brokerage, you typically do not need to know most of the rules that apply once you take more control and invest more broadly.

An IRA may be used as a down payment for a house the IRA intends to hold over the long term. This is a more complicated strategy that involves the use of a non-recourse loan for the IRA, as you may not pledge a personal guarantee. Keep in mind, it is the IRA purchasing the property - not you purchasing property using IRA money. The use of debt-financing also introduces a tax known as UDFI on the percentage of the gains the IRA receives based on the use of the non-IRA (borrowed) money. The tax impact is generally significantly smaller than the benefits of leverage and the resulting higher cash-on-cash return the IRA receives, but does introduce the filing complexity.

The repayment terms would be those offered by the lender, not anything specific to the IRS rules. Again, you are not "borrowing" money from the IRA. The IRA is the borrower on a mortgage.

The IRA could be the bank and act as a lender to another investor such as a flipper. This would not be possible, however, if you also happen to be personally involved in the flip transaction.

@Fred Canzano You may purchase real estate with your IRA. However, you are not borrowing funds from your IRA to do this. You are making the purchase with your IRA, your IRA will be named as the owner on the deed and all income and expenses must flow through the IRA that is holding the property.

Traditional brokers will not do this type of transaction or hold non-publicly traded assets since this is a specialized area of the financial services business.

You should probably contact a custodian in order to speak to someone live to get your questions answered. You can also look for local meet ups or other meetings where a custodian is providing an educational presentation.

It is a complicated topic at first, so get educated before pulling the trigger.


@Fred Canzano a Solo401K may not be available to you, but this thread covers a number of topics related to SD IRA investing that may be of use to you.

So... self directed means that self directed. Not that complicated have been doing it for almost 15 years. Careful about overpaying for unneeded fees. I pay $500 / year for my advisor to review my transactions and keep me out of trouble. We buy / sell multiple properties every year no worries all within the guidelines of IRS.

Good Luck

Originally posted by @Fred Canzano :

I'm in New Jersey and have a check from another IRA that needs to be rolled over ASAP. I want to start a self-directed IRA but cant find a financial institution that has them available for real estate investing. Tried TD Ameritrade,Wells Fargo, and a local community bank. Anyone know which financial institutions are handling SD IRA's?

 The awesome team at BiggerPockets has already compiled a great resources that shows you many of the vendors available for SDIRA as well as articles and forums that cover the topic pretty extensively. I'd encourage you to take a look.

@Fred Canzano

You have used your 1 rollover for the next 12 months. Make sure when you chose a self directed company you have them do the “transfer” otherwise your Ira will be deemed distributed and won’t exist anymore. If you need help contact me offline. 

I recommend Quest IRA out of Texas or Nuview out of Florida. These companies are well versed in using a self-directed for real estate investments. I personally have dealt a ton with Quest IRA for note purchases with my joint ventures and they understand the process an what is needed to get the deal accomplished. There isn't a lot of pushback or unnecessary documentation and hold time. Quest IRA does many events and webinars that may help you answer your questions on what you can and can't do with a Self Directed. That would be a great starting point.

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