Keep Idle Cash Working in SDIRA

[Keith Groshans]

My preferred investment in my SDIRA is mortgage notes. The monthly payments are great, but the issue I am running into is what to do with idle cash. My custodian does not have a money market or similar sweep account to keep idle cash earning. If I wait until accumulating enough cash in the account to buy another note, this will kill my yield. They do offer access to mutual funds, but I do not love this option. I am wondering if transferring the cash periodically to a standard brokerage IRA account may be my best option. If so, any one have experience doing so in a way that does not accumulate a lot of transfer fees? Any other strategies I should consider? Thanks!

[Chris Seveney]

Quote from @Keith Groshans:

My preferred investment in my SDIRA is mortgage notes. The monthly payments are great, but the issue I am running into is what to do with idle cash. My custodian does not have a money market or similar sweep account to keep idle cash earning. If I wait until accumulating enough cash in the account to buy another note, this will kill my yield. They do offer access to mutual funds, but I do not love this option. I am wondering if transferring the cash periodically to a standard brokerage IRA account may be my best option. If so, any one have experience doing so in a way that does not accumulate a lot of transfer fees? Any other strategies I should consider? Thanks!

 you could do more on private lending side which is interest only and 12-24 month loans. Another option is to look into some funds as well that allow smaller investments. some are anywhere from 500-$10,000 minimums and accept non accredited investors (through regulation a+).

If you ran numbers of a loan paying p&i at 10% but ot being able to reinvest the principal payments you realize how low your returns actually are. so yes notes are great but also understand that idle money for any investment is not fun.