Self Manage Self-Directed IRA??

Question

Hello, I'm looking to establish a Self-Directed IRA to make investments in rentals. Is it worth going through a professional company to establish and manage the IRA, or, with a bit of studying, is it worth saving on the fees to manage it myself? Is there a resource that helps guide me so I don't break any rules?

Thank you in advance!!!!

-Sophia :)

Thank you in advance!!!!

-Sophia :)

Brian Eastman · Answer

@Sophia Harris

Self-directing your retirement plan is definitely not a DIY concept.  You can work with a professional to create a structure that puts you very much in control of the investing, but always want to have someone on your team who can help you to navigate the IRS rules.

For investments like rental properties that tend to involve a lot of transactions, some of which may be time-sensitive, there will be significant benefits with a plan that offers checkbook control such as an IRA LLC or - if you qualify as self-employed with no full time employees - a Solo 401(k).

Justin Windham · Answer

@Sophia Harris

For a self-directed IRA, you will need a custodian to hold the IRA assets. You can decide whether you want to add an LLC setup by a professional to give you checkbook control of the IRA assets. The more transactions you think you'll do, the more valuable that LLC might be to you. Custodians usually charge transaction fees and asset-based fees for their services if you do not opt for checkbook control.

Solo 401k plans do not require a custodian at all, so your control of the assets is much more direct. There are many other benefits to this plan as well, but you would need some self-employment activity to be eligible. Welcome to BP!

Carl Fischer · Answer

@Sophia Harris

I agree with @Brian Eastman There are many variables to identify which option might be better. Do you intend to have many active investments, or just one or 2 passive investments? Do you have a good attorney to help you set up the checkbook IRA?LLC and/or an accountant to help you properly invest through the LLC with the IRA funds?

George Blower · Answer

@Sophia Harris

You will need have use a self-directed IRA custodian. However, the self-directed IRA can be invested in a single member LLC which generally results in lower ongoing fees, such as processing fees, holding fees, etc.

Self Manage Self-Directed IRA??

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