Looking at Strata Trust for a self-directed IRA, comments?

2 Replies

Hi I have read several posts and done my own due diligence for my self-directed IRA. I have a 401k I want to roll over so I can buy real estate with my retirement money. I have narrowed my search down to Pensco SunWest and Strata. Fees are very different. Feedback on customer service, transaction efficiency, fees (disclosed and surprise) would be appreciated. Thank you in advance! Dave

@Dave Bolduc

All three of the firms you mention will be a 3rd party processor.  They will hold the funds, sign every document, cut every check, and receive every deposit.  If by investing in real estate, you mean purchasing a plot of land and sitting on it, this business model may serve you well.

If you are considering investing in rental property, that is an asset type that is not well served by a 3rd party custodian. The paperwork, processing delays and per-transaction fees will become a real barrier to success and potentially to compliance. If a water heater breaks, will you be able to find a contractor willing to wait 7-10 days to receive a check from your IRA?

I would suggest you evaluate programs that offer checkbook control such as the IRA LLC or Solo 401(k). These will be much more nimble and efficient programs for investing in rental property. They will cost more to establish due to the legal work required to create the structure, but will cost much less per year to operate, saving you money over the long term.

@Brian Eastman

Thanks for the insight. My plan is to buy rental properties as you mentioned. I have will dig in more. I will also talk with the property manager I plan to use to get their experience with self directed IRAs.

Much appreciated!