SDIRA Custodian Recommendations

8 Replies

Hi everyone,

I am looking for some recommendations for SDIRA custodians. I have heard a lot of good things about QuestIRA, especially for buying notes in. However after looking at their fee schedule, they seem very expensive when it comes to admin fees. A 50k IRA will cost you 375$ a year in Admin fees. A 100k balance IRA will cost you 525$ a year in fees, etc etc going up and up.

They do have an option of a flat 295$ if invested in one asset. But still to me that's a lot.

Any other good places that are more reasonably priced? Or is this the cost of having a Self Directed IRA?

Thanks
Ian

@Ian Green

Prices are fairly similar in the industry. What do you plan on doing? How much money do plan to invest. Some companies also don't charge a yearly fee until you invest in an asset. 

A checkbook Ira can cost approx $275/year. However, You may have to pay state filing fees and possibly tax return filing fees. 

I personally use a seperate IRA for each asset that carries liability such as real estate. Cheap asset protection system. Keep that in mind as well. There is usually a reason for pricing structure and competition keeps it fair.

The fees you mention are usually insignificant when you compare to tax savings. It's less than a buck a day. Look for knowledge and service as well as price. 

Good luck!

@Ian Green Hello Ian, I have been using MIDLAND IRA for the last 4 years. They are in FORT MYERS. I have never had any problems with them. Give them a call they can give you information on the fees.

Good Luck

@Ian Green

Many of our clients use IRA Services Trust Company and they have been in business since 1978 so have a proven track record.

Also, you may want to look at the solo 401k if you are self-employed.

@Carl Fischer @Jesse Hargrove @George Blower

Thank you for the responses. I guess I am just a little sticker shock. I was planning to put in 10-40k to purchase performing and non performing notes. For performing I was looking to get around 15% ROI. However if you add in about 2% Admin fees and transaction costs, is it even worth it? I have a Roth IRA currently and am invested in Mutual Funds that make double digit returns. They do not charge me an admin fee at all. Maybe I need to make more then 15% to make it worth it?

The stair step fee schedule to me is sort of fishy too. It doesn't cost a company any more to administer a 10k account then a 100k account does it? Seems to just take advantage of peoples balances.

Most have a 295$ per asset cost. But if I am in a performing note for 10k. That is 3%. 3% of my return out the window....

Sorry to sound negative, just trying to see if I am missing something here. I could see a 300$ a year fee if I were to purchase a 200k asset or something.

@IAN GREEN 

Those fees are part of doing business. I thought that they were reasonable. I work in a company of 1400 people.

The company told us that it cost $80.00 to process one purchase order. So they get POed at us if we put in small purchase orders. Just an example of real world cost. I do see your point, if you are looking at 10K to 50K notes the fees will cut into your profits.  I own mutual funds too. There are fees too you just need to hunt for them. 

Good Luck in your note investing. 

@Ian Green

With most Wall St based plans, you are paying 1-3% of the asset value in some fashion, either in commission, fees, fund loads, etc. With a self-directed IRA it is just more transparent and simply based on the actual processing done.

There are some custodians that have a more fee-for-process schedule, but customer service and responsiveness are a more critical factor and fees will be relatively the same on a < $100K account in either model.

An alternative is an IRA-owned LLC or "checkbook IRA". The IRA is just in the background holding a single LLC asset. You then direct the investment transactions via the LLC. It is kind of like creating your own private hedge fund and getting to be the manager. The up front cost will be higher due to the legal work and consulting any quality provider of such services will offer (so you don't go blow up your retirement plan by being unaware of the rules). Expect $800 on the low end from a document mill on up to about $1,500 for a quality program with meaningful support. But, the annual costs will be very low, likely in the $200 - $250 range between IRA fees and LLC re-registration. There would be no per-transaction or per-asset fees. If you amortize that out over a decent period, it is actually quite inexpensive.

It might be a bit steep relative to a starting amount of $20-40K, but over a longer period of time would make real sense.

@Ian Green

At $10k which is a small account there are companies that charge $150 minimum annual fee. Helps a little but as @Brian Eastman said there is a minimum and Wall Street was good at hiding their fees. 10k at 15% can return $1500 as you suggested. $300 for the first year and $150 in subsequent years in fees is still better in most cases than paying taxes. I agree with your premise that it costs  the same to process a $10k asset as $1m asset that is why the fixed fee at $275. Less than $1 a day. 

So just as an FYI, @Carl Fischer who's been kind enough to respond a couple times here runs CamaPlan which I've heard nothing but good things about as a SDIRA custodian so you might look into them. I don't have an IRA with them, but I've heard him speak and seen how active he is on here so they're probably worth a look on your part.

Just to put things in perspective...if you do end up buying even a single note in your SDIRA, consider that the yearly fee for your SDIRA is probably covered by your first 2 payments if or once it's performing. Personally in the interests of full disclosure I'm with @Dmitriy Fomichenko and Sense Financial which offers a BP bonus to new participants. First year will cost you a chunk, but $200/yr thereafter regardless of your balance or activity since you're the custodian. Feel free to correct me if I've misrepresented you in any way Dmitriy.

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