Self Directed IRA provider

9 Replies

Hi BPers,

Hope you are all well 

Wanted to reach out and see if you have any recommendation for a company that can help me use my 401K from previous employers (now with Fidelity IRA) and convert them to a self directed IRA so I can use this to buy long term out of state real estate properties.

I live in the bay area and will appreciate your input guys




First you should determine which self-directed retirement account would be the best fit for you. There are several options available:

1) Custodial self-directed IRA - your funds are held with custodian allowing alternative investments, you can invest into almost anything but every transactions goes through custodian with applicable fees.

2) Checkbook IRA allows you to bypass the custodian and have checkbook control over your IRA.

3) Truly self-directed Solo 401k is the most flexible and cost efficient, it does not require a custodian, offers checkbook control, allows you to personally borrow from your account, not subject to UBIT on leveraged real estate and offers contribution limit 10 times more than an IRA. It is not for everyone however, you must have legitimate self-employment activity or small business w/o full time employees in order to quality.

There are several reputable providers who are active participants on the forum, do some search, read other discussions, contact couple of them and personally interview them, review their references, then make your choice. 

@Fernando Enrile

Good advice from from @Dmitriy Fomichenko I much prefer clients to use a 401k than a checkbook LLC Ira for many reasons. If you use either one make sure you have guidance at least in the beginning. We see too many individuals make prohibited transactions without knowing it. They are great for wealth builders so I'm glad you are moving in the right direction.

@Fernando Enrile

BP is the best place to explore your options and get great info about self-directed retirement accounts.

You may have multiple options, depending on your current employment status and mix of retirement funds.

Solo 401k is the more attractive option, but you've got to qualify. Qualifying requires you to have self-employment income.

SDIRA is available to you regardless of self-employment income, but is not as versatile as the Solo 401k.

Both SDIRA and Solo 401k are available as either (a) Custodian Accounts or (b) Checkbook Control Accounts.

Whichever route you choose, make sure you're aware of the prohibited transaction rules that apply to both SDIRAs and Solo 401(k)s.

@Fernando Enrile

As others have mentioned, a self-directed IRA can be a great option, but if you're eligible for a Solo 401k, it is usually a better choice.

If you would like to have checkbook control, the Solo 401k can provide it without the need for a custodial middleman or an additional LLC; both are required for a checkbook IRA. I'd recommend reaching out to a few providers on BP to learn about your options and see what makes the most sense to you.