How to find a good Solo 401k provider

6 Replies

I have a little nest egg in my traditional 401K that I have through working a W2. I now would like to lend money to myself to be a down payment on a flip. I've read up and think that a Solo self-directed 401k would be the best way to go for this purpose (up to 50k loan) to myself.

But there are a lot of companies out there that sell DIY kit with documents and forms.  Should I look for a local CPA to set this up for me, a document farm and work it out myself, or something else.

Because I'm hoping for a budget option, perhaps I could find a document farm that would provide support if I had questions during and after initial set up. I'm willing to call around to a handful of providers to vet them, but how would I know if I've found a good one?


@Dave Peterson

If your only real interest is the loan, you do not need to take on the administrative burdens that come with a custom checkbook plan.  Go to E*Trade or UBS.  I believe they both offer the loan provision.

The self-directed plan becomes a benefit if you wish to invest the plan itself directly into non-traditional assets.  In that case, you definitely do not want a set of documents from a web site.  You need a qualified professional to guide you on the usage and administration of the plan in accordance with IRS guidelines.

@Brian Eastman

It is just the loan I'm looking for at the moment. But lets assume my business grows to the point where I do want a solo 401k for all the advantages, what would I look for in a 'qualified professional'?  Someone close to where I live, available by phone, experience in the industry, lists pricing online? Those are the type of things I'm asking about.


All those are important considerations when selecting quality provider. There are few of us here on BP, just do some search and you'll find some discussions on the topic, read, review references, select 2 or 3 providers and speak to them. 

@Dave Peterson , as far as picking a provider, my advice is to give a call to a few of the providers who chime in with their expertise here like @Dmitriy Fomichenko , @Brian Eastman and others and see who might be the best fit for you. I would HIGHLY recommend this over using one of the 'big ones' out there where you are just a number. I talked to several including the ones I mentioned, and ALL of them were more helpful that the big names out there. 

No advice as far as the loan aspect as I have not done that. I can tell you that the SOLO401K is MUCH easier as far as book keeping goes if you are going to leverage your funds within the plan. 

Dan Dietz

@Dave Peterson

If your interest is primarily in taking a participant loan for $50k, there will be at least $50k remaining in the Solo 401k for investment. You might want to consider a plan with a provider that allows for alternative assets if you think the returns you can get on those funds with increased asset flexibility would justify the setup fee. Comparing your traditional returns with those generated by real estate investments may be an eye opener for you.