Self-Directed IRA: Finding a Custodian For Self-Directed Individual Retirement Account (IRA)Part 3

Where do you start with your self-directed IRA?

This is Part 3 of a Multi-Part Series on Investing with Self-Directed retirement accounts.

In order to be able to participate in the type of “creative” investments mentioned in the last article – things like mortgages, real estate, businesses, etc. – with your tax-sheltered retirement funds (Roth and Traditional IRA’s), you’ll need to have a custodian for your account that allows you to truly self-direct your funds into the many different types of investment articles allowed under the law.

A good self-directed IRA custodian will help guide you through the thorny process of designating your investments, ensuring your investment partners comply with applicable reporting standards, and making sure your IRA funds maintain their tax-protected status by complying with applicable law.  Look for great service and a track record to rely upon.  After that look for reasonable fees.

Here are a few custodians we’ve worked with, that you may want to consider:

1) Pensco Trust (http://www.PenscoTrust.com) – This company has a more complicated fee schedule.  There is a $50 set up charge, plus an annual maintenance fee of $350 for accounts valued at $1 – $69,000.  After that, there is a sliding scale that reflects both a fixed fee, plus a percentage of your portfolio’s value.  Click here for the fee schedule: http://www.penscotrust.com/fees/ira_fees.asp

2) Equity Trust Company (http://www.TrustETC.com) – Formerly known as Mid-Ohio Securities.  This company charges a $50 set up fee and account maintenance fees based on the assets under management, starting at $190/year for the smallest accounts (you can begin with just $1.00) and ranging up to $440/year for $200,000 under management.  The fees cap out at $1,850/year for a million or more.  These fees are all-inclusive and the company avoids nickle-and-diming you with transaction-related fees.

3) First Trust Company of Onaga (http://www.ftconaga.com) – I was not able to find a published fee schedule on their website.  They do charge fees for each activity you request of them, but whether or not this is cost effective will depend on their fee schedule, your portfolio size, and your anticipated activity level.  I suggest you call the company to find out more about their rates.

These are three good companies that investors we know have worked with.  Any of them would be able to help you invest your retirement funds in a non-traditional investment vehicle, as long as the investment type was allowed by the US government and the investment followed the rules about being an arms-length transaction.  Check out these vendors and decide which one is right for you.  Call them up and get the forms you’ll need to switch over your funds.

In the next article, I will will explain how to find OTHER people with funds in their IRA’s who will be your private investors when you have a deal come through.  Educating them about how to get control over their funds so they can invest in your deals is a great next step!  Stay tuned for more information on investing your IRA in real estate!

Until next time….Emily

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