Hi. I invest in tax lien certificates in NJ, and I'm looking to create what I think is called a "self-directed IRA LLC with checking". In other words, I want to be able to roll some money from an existing IRA into an IRA from which I can use the money to invest in tax lien certificates (or other real estate if I choose). The catch though, is that I'll need access to the money on demand, so that I can wire cash to a given municipality should I win an auction for a certificate. (You usually need to wire the money within a couple of hours of winning the bid in these situations.)
I found one company that does this, but they charge around $1500 to set everything up, which I thought was a bit much. Is anyone doing this currently, or does anyone know how I can set this up without it costing so much?
I set one up some years ago with Guidant Financial. IIRC it was more like $3000 to set it up. Maybe cheaper ways to do it now, but the operating agreement is key to getting this right. Guidant has since sold this part of their business to law firm in Utah. Who's name I can't recall.
I think about $1500 is about the going rate to set these up.
There are two types of firms offering Checkbook IRA Plans:
1) Document providers, which are essentially just marketing the product and producing the documents and not really able to provide meaningful support.
2) True advisory firms that implement and support such plans, and can provide ongoing access to high quality guidance regarding plan administration and keeping your investment strategies within the IRS rules.
The price for the latter will typically be in the $1500-$2000 range, and considering the value over several years of investing is really quite a bargain.
You can "just get the docs" and perhaps even promises of support (from untrained call center staff) for $800-1200. The savings is just not worth the sacrifice when you consider the risk of IRS penalties if you get it wrong.
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