I want to move my Roth into an Self Directed. Does anyone know any companies in Virginia or can recommend someone you are already working with/ popular companies?
I use Equity Trust. They aren't in Virginia, but I only email and phone them anyway. They are a little old school in that they still require wet signatures and think that a fax machine is faster than email. Outside of that, they've been very helpful and easy to work with.
Also, they don't do the sd ira llc where you have a checkbook and do whatever you want. You have to go through them to buy and sell.
There are many Self-Directed IRA custodians out there. It is advisable to do your due diligence and ask about such things as how long have they been in business, are alternative assets their sole focus, are they BBB accredited and rated, are they a regulated financial institution, have they ever been sanctioned by any regulatory bodies, how many accounts and how much in assets do they administer? What's their technology platform like, is it user-friendly or offer any self-service features? Do they allow electronic signatures and document uploads, as opposed to wet signatures and hard mail or faxing? And , as Joseph mentions, will they accept Single Member LLCs?
Self directed IRA plans are a pretty specialty field. Only a handful of firms offer such services and geography is often fairly low on the list of criteria you should use when evaluating a provider. Expertise, quality of service, and the business model offered relative to your goals will be much more important factors.
Selecting the right provider and right plan type will very much depend on your situation and goals. IRA Custodians (generally with trust in the name) will serve as processor for your transactions. That works OK for more static investments, but will not provide you with the access to capital you require for more time-sensitive or transaction intensive asset classes.
Advisory firms establish plans offering checkbook control, either with an IRA-owned LLC or a Solo 401k trust. Depending on who you choose to work with, the level of ongoing support after the initial plan setup will vary, so be sure to find a firm that has the expertise and business model to support you in using the tool they have created for you.
There are a lot of posts on this topic here on BP. Good luck with your research, and ultimately, with your investing.
Thank you. What do you put your IRA money in when its not wrapped up in real estate? If you take a distribution is it taxed?
Many Self-Directed IRA custodians will allow traditional investments as well as alternative assets. You need to keep some in reserve for repairs, expenses and property taxes related to your RE investment. But you are free to invest returns, for example rental income, in other alternative assets (private equity, private debt, crowdfunding opportunities, etc) or in stocks, bonds and mutual funds. Most custodians will pay a modicum of interest, as uninvested cash is held in a money market account with FDIC insurance (cash only).
All "dividends stay in the IRA...then you can do any type of traditional/SDIRA investment you want.
While u are looking into this, I would strongly suggest that instead of buying and holding the real estate in your SDIRA, let the SDIRA become the lender. Now you can't lend it to yourself to buy outside the SDIRA, but you can lend to someone else.
Instead of getting the cash flow, you get the interest along with the principle, just like a bank would get...and, you don't pay for utilities, rehab, repairs, handle tenants, pay taxes, insurance, ...did I mention you don't deal with the tenants?, well it's worth repeating.
If the borrower defaults, your SDIRA forecloses. This is the way I do it now.
You also avoid the maximum loan restriction since the SDIRA owner isn't bound by it.
I'm not eligible to take distributions, yet, but they would be taxed. I'm thinking of converting to a Roth so it won't be taxed when I pull cash out. You could spend hours arguing over whether that makes sense, but that is a separate discussion.
My SD IRA is simple. I do active RE investing outside the IRA. I'm in a limited partnership in the IRA. I also have notes. Cash is kept in a money market account until I can put it to use again. My goal is to not keep cash idle too long, but that is a challenge.
I like IRA Services Trust Company.