Who is your self-directed IRA custodian of choice & why?

Tax, SDIRAs & Cost Segregation
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Who is your self-directed IRA custodian of choice & why?

Kevin Lunt
Private Money Lender · Omaha, NE · Member since 2010 · 146 posts · 47 votes

I'm curious to hear people's choices and reasons for using and/or reasons for not using any of the numerous self-directed IRA custodians out there.

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Chris Martin
Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
15y

Given that some employers match pre-tax 401K contributions dollar for dollar, and that all earnings were (are) tax deferred, there was/is no reason not to contribute to retirement. While I understand your point, I believe this thread is about people with existing IRAs and 401Ks and their using tax free (ROTH IRA) or tax deferred (traditional IRA) methods to self-contribute to their retirement.

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  • Kevin Lunt
    OP
    Private Money Lender · Omaha, NE · Member since 2010 · 146 posts · 47 votes
    15y

    Doesn't anyone here have a self-directed IRA?

    0Reply
  • Eric M.
    Flipper/Rehabber · Louisville, KY · Member since 2008 · 1k+ posts · 1k+ votes
    15y

    Myself, being your own trustee gives the ultimate control at the lowest cost.

    However, it is not for newbies. You must understand all the rules.

    Otherwise, Equity Trust does a premium job for a premium price.

    I have experience too with Sterling Trust and Sunwest. They are both fine. I would rank their service and cost slightly below Equity Trust.

    2Reply
  • Michael Lauther
    Investor · Hampton Bays, NY · Member since 2009 · 907 posts · 258 votes
    15y

    I use Equity Trust and they have been responsive to my needs.

    0Reply
  • Kevin Lunt
    OP
    Private Money Lender · Omaha, NE · Member since 2010 · 146 posts · 47 votes
    15y

    Thanks guys! High marks for Equity Trust, so far. Anyone recommend either to use or not use another custodian?

    0Reply
  • Mike G.
    Rehabber / Flipper · Simi Valley, CA · Member since 2010 · 597 posts · 259 votes
    15y

    Good question, Kevin. I am interested in this myself. I have also heard others recommend Entrust, Guidant, and uDirect IRA Services.

    I have heard that Entrust might be quicker to respond/fund than Equity Trust, and you may be more likely to have an office near you.

    I heard that you have more direct control with Guidant and can get at your money quickly. Also, you supposedly some time with a lawyer when you sign up to ask whatever questions you want. It seems like their setup fees are higher, but ongoing fees are lower.

    Haven't heard anything specific about uDirect.

    Understand that I have no direct information about any of these companies as of yet. I'm hoping there are some nice people on here who can verify/refute any of this or suggest a good company or one to avoid. I post this because I have seen a number of people on here mention that they switched away from Equity Trust to another company.

    It would be great if there was a side-by-side comparison sheet for these companies, wouldn't it? :)

    0Reply
  • Mark UpdegraffBusiness Member
    Real Estate Broker · Rochester, NY · Member since 2010 · 1k+ posts · 689 votes
    15y
    Originally posted by Eric Michaels:
    Myself, being your own trustee gives the ultimate control at the lowest cost.

    However, it is not for newbies. You must understand all the rules.

    Hey Eric, Where is a good starting place for newbs? Is there any literature that you recommend?

    Thanks again!
    Mark

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    1Reply
  • Chris Martin
    Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
    15y

    I'll make a plug for Equity Trust Company. I went SDIRA a few months ago with ETC and closed my first SDIRA property acquisition last week. Lots of little "experiences" for me having to direct the investment W/O checkbook control. That's a different topic I may get to sometime soon. I give ETC a thumbs up overall. Mark Claire Updegraff, take a look at http://www.trustetc.com/ since I think their web site has good information. Browse the forms under the "Client Forms" tab to get a feel for how they organize their client interface and how their 'direction of investments' choices work. Lots of stuff to explore, including their straight forward fee schedule. I looked though their forms before I selected ETC as my SDIRA custodian. It seemed like they had their processes down and figured ETC would be a good choice for me. And at this point, it certainly is a good choice for me.

    0Reply
  • Kevin Lunt
    OP
    Private Money Lender · Omaha, NE · Member since 2010 · 146 posts · 47 votes
    15y

    I have been in contact with someone at Equity Trust for some time & am in the process of transferring an acct over to them. It is comforting to hear so much positive feedback regarding their services. Thanks to everyone who responded!

    0Reply
  • J ScottPro Member
    Moderator
    Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
    15y

    I've had a 401K Company set up through Guidant for the past couple years and have just recently moved all my funds to Equity Trust.

    I wouldn't recommend the 401K Companies, despite their great flexibility, and haven't been thrilled with Guidant.

    Equity Trust seems pretty good, so far...

    Podcast Guest on Show The Truth About Real Estate Investing in 2024 (What Investors NEED to Know)
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  • Dale Osborn
    Mobile Home Investor · Spanaway, WA · Member since 2008 · 1k+ posts · 578 votes
    15y

    Why bother setting up something that is really unnecessary. Invest in real estate - roll over the proceeds from one property into another using a 1031 exchange.Anytime you have someone elses hand in the pot - the money has a way of moving from your pocket into someone else's pocket. Usually the other person has "BiggerPockets"!

    1Reply
  • Chris Martin
    Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
    15y
    Originally posted by Realtyman:
    Why bother setting up something that is really unnecessary. Invest in real estate - roll over the proceeds from one property into another using a 1031 exchange.Anytime you have someone elses hand in the pot - the money has a way of moving from your pocket into someone else's pocket. Usually the other person has "BiggerPockets"!

    I'm not sure why you say a self directed IRA is not necessary. I think the SDIRA custodian is indeed necessary to follow IRA rules, right? I think 1031 exchanges are appropriate for taxed (e.g. large depreciation liabilities) RE investments but do not have a place in the SDIRA context.

    0Reply
  • J ScottPro Member
    Moderator
    Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
    15y
    Originally posted by Realtyman:
    Why bother setting up something that is really unnecessary. Invest in real estate - roll over the proceeds from one property into another using a 1031 exchange

    How do you invest retirement money in individual pieces of real estate without a self directed IRA?

    And why would you need to do 1031 exchanges with retirement money when that money is not taxed on the sale of the property (it's either taxed when you contribute or when you withdraw)?

    Podcast Guest on Show The Truth About Real Estate Investing in 2024 (What Investors NEED to Know)
    1Reply
  • Dale Osborn
    Mobile Home Investor · Spanaway, WA · Member since 2008 · 1k+ posts · 578 votes
    15y

    Some people make it through life without setting up a retirement plan for others to issue their own money back to them. That is why I stated why bother. If you have real estate income coming in - it is better than any retirement plan available. The ones that are non self directed are slowly losing their funds through the investment into stocks, bonds or mutual funds and from management fees. Their money is being transferred from their pocket into someone else's pocket. Take control of your own funds in their entirety without setting up a retirement fund.

    0Reply
  • Bill Gulley
    Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
    15y

    Dale, it's a use of funds and tax benefit, especially for younger investors. Your thinking is gerat too, as it fits your overall plan and needs I'm sure. Having you funds sit in the SDIRA instead of a bank certainly has benefits. But then, if you're on the Board at the bank, maybe you should have your cash there....

    And, I have heard good things about Entrust, so chalk up one more point for them....Later

    1Reply
  • Chris Martin
    Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
    15y

    Given that some employers match pre-tax 401K contributions dollar for dollar, and that all earnings were (are) tax deferred, there was/is no reason not to contribute to retirement. While I understand your point, I believe this thread is about people with existing IRAs and 401Ks and their using tax free (ROTH IRA) or tax deferred (traditional IRA) methods to self-contribute to their retirement.

    3Reply
  • Mike G.
    Rehabber / Flipper · Simi Valley, CA · Member since 2010 · 597 posts · 259 votes
    15y

    Personally, I think Dale (aka Realtyman) has a very good point, and it is a legitimate one for people to consider when investing for their retirement. I really wish I had not put so much money into a 401k and that I now had direct access to use that money as I wish.

    But, I do have a 401k and I'm thinking of converting to a Self-Directed IRA. As Chris said, I am hoping that this thread will help me determine a good SDIRA company to use.

    So far, the recommendations I see here are for Equity Trust and Entrust, and one against Guidant.

    0Reply
  • Kevin Lunt
    OP
    Private Money Lender · Omaha, NE · Member since 2010 · 146 posts · 47 votes
    15y

    Mike-- Thanks for keeping the score! :)

    Dale-- Good points raised, as always. However a SDIRA can have its place. For example, if one inherits a retirement acct from a parent. It could be left where it is, or rolled over to another company. If it is not a self-directed acct, your investment options are limited. If it is rolled over to a SDIRA, one's options expand.

    Great replies from everyone here!

    0Reply
  • Dave G
    Investor · st pete · Member since 2009 · 11 posts · 3 votes
    15y

    I have been using Equity Trust for close to 2 years, and have not been happy with them. I buy notes from guys who flip and even when I pay the expedited fees they rarely get the direction of investment completed within a reasonable amount of time (72hrs). When their "compliance dept" does not accept the paperwork you can never talk to them directly and the reps often contradict each other on what needs to be corrected. Also it seems a little better this month, but I have waited as long as 2 hrs to get someone on the phone last year. Average wait was about 45min. They claim they have no hidden fees but when you factor in all the charges I am paying well over 1200.00 per year. I want to switch to another custodian, maybe udirect soon.

    When you are looking at different choices don't forget to factor in your own time as part of the cost. Yes they have a nice website, and great marketing, but I wasted so much time with these clowns transacting simple deals which in some case cost me money due to their slow execution.

    1Reply
  • Loc R.
    Note Investor · Pasadena, CA · Member since 2009 · 849 posts · 544 votes
    15y

    I am with Equity Trust, and I am very UNHAPPY with them. They have the most unqualified, unknowledgable staff I have ever dealt with at any level.

    Unfortunately, I have a lot of notes with them, and it would be a paperwork nightmare to transfer it all over.

    1Reply
  • Bob Oliver
    Investor · Surry, VA · Member since 2010 · 19 posts · 4 votes
    15y

    I went with solo-k.com. Inexpensive and bare bones. I set up my own LLC, Lawrence at solo-k prepared the trust docs, I opened the custodial checking acct, and i am now in full control of my funds. Know what is allowed and not allowed and do nothing that personally benefits you and you are on your way. i have yet to obtain a non-recourse loan for RE acquisition but that is coming. Anyone done that yet through their plan?

    0Reply
  • Mike G.
    Rehabber / Flipper · Simi Valley, CA · Member since 2010 · 597 posts · 259 votes
    15y

    Glad to hear the solo-k is working for you, Bob. I don't think I'd want to set up an LLC for this here in California, where the fee is $800 per year.

    I'm sure others have done non-recourse loans through their SD plan - you might want to start your own thread about that (or search and maybe someone has already discussed it).

    I was considering using Equity Trust based on the recommendations of a few people on BP, and ET's relatively low cost compared to the other companies I was looking at, but after the latest two reviews, I'm not so sure. Hmm...

    0Reply
  • Chris L.
    Investor · Fort Wayne, IN · Member since 2009 · 391 posts · 257 votes
    15y

    I am also considering moving my IRA from a traditional brokerage to a SD-IRA.
    Loc and Dave G are not satisfied and are dealing with notes. I wonder if there is a difference in service between flipping houses in your IRA or making multiple note transactions.
    Realtyman, one of the more significant reasons that someone would set up a 401K is that many employers have a matching contribution plan which is a pretty strong incentive.
    I continue to monitor these threads but will probably just need to give it a try at some point and see what happens.
    Chris

    0Reply
  • Chuck Townsend
    Hard Money Lender · Denver, CO · Member since 2009 · 11 posts · 4 votes
    15y

    I recently switched my SDIRA to Entrust and am very pleased with their customer service and responsiveness. My former custodian was Millennium Trust in Oakbrook, IL. Their customer service was the worst.

    0Reply
  • Jeff S.
    Lender · Los Angeles, CA · Member since 2009 · 1k+ posts · 2k+ votes
    15y

    Here’s a link to a website with a comparison of several IRA custodians: http://www.thehardmoneypros.com/self_directed_ira_custodians.shtm

    If you scroll down you can download their pricing comparison spreadsheet. The numbers might be out of date but you should be able to easily update them with the links provided. By the way, this was sent to me and I have no idea who owns the web site.

    I personally use IRAServices and found them to be the cheapest of all custodians by a long shot. Not long ago, I funded a hard money loan through them and they came through on very short notice. It was for an REO with a very difficult and unaccommodating bank. IRAServices gave me the name, direct phone number, and email address of their person handing my file. He jumped through some very small hoops to help get the deal done. Though I was appreciative of their service, it convinced me to go the checkbook route and become trustee of a self-directed 401k instead. In my view, it’s the cheapest way to go and provides 100% complete control; cutting out the custodian and need for an LLC.

    1Reply
  • David Hughes
    Real Estate Investor · Bentonville, AR · Member since 2009 · 19 posts · 1 vote
    15y

    Bob Oliver, last year I also set up a solo-k with Lawrence and transferred my 401k funds into it. Quick, cheap, and painless process. Now I am poised to take action on the right investment when I find it.

    I researched the other SDIRA options and couldn't beat the value and flexibility of solo-k.com.

    0Reply
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