Self-Directed IRA's with Checkbook Control

I’ve blogged a couple of times here at RCG about the benefits of using a self-directed IRA as an investment vehicle in Real Estate. When I originally set up my self-directed IRA I loved that I could control my retirement funds not only in securities but also in real estate.  I had to educate myself by going to seminars and talking to the very few professionals that understood the process.  However, being the do-it-yourselfer that I am, I traveled around the country attending lectures and symposiums until it started sinking in.

I set up the necessary entity and rolled over my IRAs and Seps into a Roth IRA (paid the taxes), created an LLC to buy real estate and then had my Roth IRA buy shares of my LLC.  This has been a great way to grow my retirement without ever paying taxes on the profit.

However, the process was cumbersome, I never thoroughly understood all the scary laws that would cause my self-directed IRA to loose it’s status and it was not always as fluid as I’d like. Such as, had I not attended the classes and done the research, I wouldn’t have even known where to go for the custodian that is required for the self directed retirement accounts.  Then, I had to find an accountant and an attorney who specialized in them.  Again, hard to find. Additionally, although I had good services in my chosen Custodial firm, I didn’t have the ability to have instant access to my money, and in fact, last month when I tried to take a distribution, it took over a week to get the cash out.  What if I’d wanted to purchase a home on the court house steps? not possible with my custodian.  I have no access to cash, nor do I have a checkbook.

Recently, I’ve learned of a completely different way of investing with self-directed IRA’s that’s being offered here in our own backyard in Bellevue. The company is Guidant Financial and they’ve developed a product called ‘Auriga’, (Auriga means the helsman of one’s ship).  Although I’m just learning about this product, it appears to provide a solution to problems inherent in custodial accounts by giving you checkbook control over your retirement account.  Additionally, Auriga allows the retirement plan to invest in more than one vehicle, and in my case, where my LLC sometimes is the owner of the property and sometimes is the lender, it allows for that flexibility.  Guidant is not the Custodial account for the IRA’s but has negotiated a very low fee thru a custodial business relationship that is not based on increasing the fee as the account increases in value.  The way they do this is to provide all the legal, accounting and guidance as Guidant Financial, streamlining the custodial role. My experience is that the custodian cannot give legal, accounting or much of any assistance in setting up the account, but it does charge an annual fee based on the size of the account.  Guidant Financial charges a one time up front fee for the setup and continued operation of the IRA account.  As your account value grows, the costs are still minimal since the custodian fees are not based on the size of the asset.

For more information there will be a webinar on Wednesday November 28 at 12pm.  I know that I’m not alone out there with my self-directed real estate investing.

46 thoughts on “Self-Directed IRA's with Checkbook Control

  1. Good stuff Eileen, I enjoy helping people build their wealth through Real Estate.

    I have been focusing my attentions on education funds. Grandparents (usually more liquid)are the best suited for buying rental properties to pay for tuition.

    The idea is to purchase now while the grandchildren are young. Investing enough upfront, so that there is a small positive cash flow with a 15 year note. Then the family can do one or two things, sell the property and use the cash to pay for tuition or use the monthly revenue.

    This can be done in family trust and the properties can be used for generations to come for education. If every generation added one or two properties they could do very well for themselves.

  2. Chris: I’ve heard about the trusts and family foundations as a means to avoid taxation on the profits. Do you use those, too or are you concentrating on the trusts. Unless they’re the same thing. I’ve attended a couple of family foundation seminars but can’t remember what the drawbacks were.
    Do you not use the self directed programs then? The company that I blogged about focuses alot on using reitrements to buy businesses and franchises, too.Apparently can work in their own franchise or busienss whereas with the ira’s, you have all the self dealing issues.

  3. A great Self Directed IRA Custodian that I would like to also recommend that has low custodial fees, provides great service and understands the needs of IRA, LLC clients is Sunwest Trust. The are located in Albuquerque, New Mexico. Their phone number is 800-642-7167.

  4. Joshua,
    Did you check out the Guidant site? The reason I like it is because all the professionals are in one place and once it’s set up, you get all the help without the cost. I’m currently with Pensco Trust and they’re a wonderful custodian, but I went through 3 attorneys while they researched the material even though they all claimed to have experience in the self directed fields. That was 5 years ago, though and it looks as if there are more knowledgable professionals now. I love the webinars tht Pensco puts on all the time and if you miss them, they have downloadable material.

  5. Eilieen,

    Yes, I am familiar with Guidant and I agree that one can go through a number of attorneys to find one that is competent in the Self Directed IRA field. I think Guidant; however, is on the pricier side for their IRA LLC and 401k business. I would shop around online. There are other advisors and facilitators that charge about half of what they do for the same thing.

    Pensco is a good company as well, but they are as far as custodians go they are also on the pricey side as well. I agree they have good webinars and they have a good free ebook. I have listened to some of the webinars and they are worth listening to.

    We all have our favorites. I am impressed with Sunwest Trust. I visited them a few years back and talk with them regularly. Their service is very good and they understand how to deal with Truly Self Directed IRA investors. Thanks for the opportunity to post my thoughts and comments.

  6. Have you heard of TSD-IRA (Truly Self Directed IRA)? It is a great web site dedicated to helping IRA investors set up Self Directed IRAs with checkbook control.

    They have a great free e-book that answers a lot of questions about truly self directing an IRA. Check them out at

  7. I am looking for an accountant and attorney who actually knows the ins and outs of self directed IRA’s your help and direction is appreciated.

  8. Moore, I went to your site and it’s very educational and I like the E-Book. I’m training an agent in investment real estate so can really use the e book. Is this your site or a site you use?

  9. Jeff,

    I set up my account with Guidant over 2 years ago and I was extremely pleased with their service. They actually paid an attorney who was a specialist in self directed IRA’s to go over their Auriga program with me for 2 hours.

  10. Shill:

    One who poses as a satisfied customer or an enthusiastic gambler to dupe bystanders into participating in a swindle.

    I assumed it was Cordoba or someone in his group because I remember him being accused with that unique word year’s ago.

    There are many groups out there who will charge around $2,500-$2,600 to set up the LLC, a couple who charge $3,500 – $4,500 to compensate for an over bloated marketing budget and a couple cheap packages like the do it yourself.

  11. Josh
    I was going to set up a 401K inside of a new C Corp. apparently not the right vehicle for me since I”m already 61. Was just trying to earn my REMAX franchise income inside of a retirement plan, but not enough advantages to spend the 5400 it would apparently cost. I’m going to play with the state of Nevada site today and see if I can set up my own LLC using Legaleze and a Nevada LLC on the Nevada state site. Anyone done this before? I done it about 12 times in Washington state and saved a bundle in legal fees since, unless I’m wrong, arent’ articles, amendments and bylaws just boilerplate anyway? Anyone?

  12. Anyone have an accountant for the Self Directed IRA LLC? I need to do my taxes etc and wasnt sure where to get started.

  13. Go to Go to preferred providers. There you will find attorneys and CPAs that understand these systems.

  14. I flipped a home last year in my self-directed IRA. I made a little money, but could have done better if I had just timed the stock market correctly. Hind sight is 20/20, but I am still kicking myself. The process was inefficient and cumbersome, faxing all those expense receipts to PENSCO. I hired a contractor to do the labor, but I still had to act as the project manager.

    Now I think I have analysis paralysis. I have all that dough just sitting on the sidelines, and I don’t trust the stock market. I am thinking about buying some foreclosures and just renting them for 5 to 10 years.

    Another crazy thought I had was to use the money to build some starter homes. I really like the idea of modular “green” homes that use passive solar energy for heating. I think they can be built economically, and I love the ones with really contemporary architechture. Has anyone tried this? I welcome your insight and input. Thanks.

  15. First comment on this post in over a year. Thanks for your input. With Pensco, did you do the solo 401K? That’s the one with checkbook control that you are not supposed to have so much faxing to do. I bought shares of a private company I created last year and boy that was tough. Pensco required alot of paperwork, but they give great guidance too.
    Entrust also does them, so does Guidant. Guidant and Entrust don’t charge as much as Pensco.

    I’ve been a general contractor, so the idea of building another house, no matter how cookie cutter presently turns my stomach. What kind of a return are you looking for?

  16. Hi Eileen,
    I did not do the solo(k), I can’t remember why now…

    As far as returns, it would be nice to get a solid 10% return. My husband and I have been saving diligently for the last 15 years in mutual funds. Over that time period, the return has been horrible. We are 40 now, and can’t afford another 15 years like the last 15. I feel like the stock market is such a crap shoot.

    My background is mechanical engineering, but my passion is real estate. I know it is sort of a strange combination. I see that you have a science background as well. Perhaps my aspirations are too lofty, but I would love to use our money to build something worthwhile. I am imagining whole subdivisions with homes built to last, using solar power for heating, cooling, lighting, etc. I also think its crazy that we use potable water for our lawns. Have you had any experience with “green building”?

  17. I did look into building to get the ‘green’ designation. It’s pretty expensive. You have to do alot to the foundation and the type of building and no one was ready to pay better money for that. Let me give you a for instance. You do a smoke test on the HVAC system by running smoke through the duct work and seeing where it leaks. then you basically paint a thick goo, for want of a better word, all over the ducts until you can’t see smoke anymore. Only then does a 95% furnace do any good and this process adds cost. I did a blog on this on RCG somewhere, if you search for ‘smokin’ I think.
    Anyway, overall the green building probably adds 10% which can be your profit and the public wasn’t ready but things may be changing. I see alot of interest in self sufficiency which are add ons that the homeowner can buy, like raising chickens, composting gardens, I see the little wind vanes sitting by the power boxes in our neighborhood and I’ve looked into that but haven’t talked to anyone to see if their energy bill is reduced. Other place, there are devices that capture the sun. Our builder added a 30K system on the roof of the home next door and added the 30K to the price. He never did sell the home and ended up giving it away cuz the recession hit. I know Costco which headquarters in Issaquah where I live, has the best rating in the country for their green buildings because my friend, an attorney for Costco made sure it was that way. She’s the Queen of Green and now is invited to the colleges to teach how to have a green building.

    10% return isn’t asking too much. If you do get into the building business, believe me, it’s no fun. I hated it myself because there is so so so much little detail you have to keep track of, like faucets, fixtures, paint, ugh ugh ugh. If it’s fun on one house, it’s druggery on others, plus there is too much speculation and at your stage you may want something less risky. Try investing with someone that is doing what you want to do and just ask for 10%. If you are an accredited investor i.e., have 1 million not counting your home, or 200K income, then you’d be eligible for buying a share of a private placement. Let me know if you want to know more about that.
    Fun chatting. Yes, I’m a chemist. Only didn’t write my PhD thesis and got sidetracked to go to medical school instead. Then babies, etc etc and life happens. Plus ex-husband went to Dental school instead. It’s ok cuz I now love what I’m doing. Engineers do alot of thinking. I overthink sometimes but I still take risks and I’m not sure in the end that’s the best way to live life. I guess I’ll only know when it’s over 🙂

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