Self Directed IRA Lesson Learned

[Dan Fisher]

Hello BP community. Recently I purchased properties through my SDIRA account. I was shocked to find out that I was charged a $35 wire transfer fee for the rents received. That means that every year that I collect rents monthly it would total $420 in addition to the annual fee I'm already paying. Obviously, these fees cut into my ROI. I take blame for not looking closer at the fee schedule and am starting to look for lower cost SDIRA providers. I actually saw one that had a fee of only $10 per incoming wire (or only $120/year) so I'll probably be switching over. I would appreciate if anyone has suggestions to lower cost SDIRA providers. Thanks.

[Daniel Dietz]

@Dan Fisher,

@Brian Eastman covered it perfectly above. We have used the 'checkbook control' model since we started, so I dont have any experience doing it any other way. When I explored the options, the ONLY reason I could see for going the 'long route' would be that it *might* prevent you from doing 'prohibited transactions' since in theory that is part of what the Custodian is supposed to be doing (as I understand it). 

I DID do a LOT of reading and studying what those prohibited transactions were/are to make sure we steered clear of them. A couple of the advantages besides the obvious cost savings in our case are that a couple of our tenants like to pay in cash - easier when working directly with them. We have had a few incidents where we needed plumbers, electricians, etc... for urgent service work - when you cut them a check before they leave the job, they are more likely to come at a moments notice the next time you need them too.

We use UDirect IRA Services out of California and have been very happy with them.

Dan Dietz