There are different stages of control concerning investing in individual retirement accounts. For investors desiring more control over their traditional or Roth IRAs, moving toward a self-directed IRA provides them more freedom to invest. Yet, for investors seeking even more freedom, setting up a IRA LLC is becoming a popular trend. In this article, let’s discuss the differences between self-directed IRAs LLC vs. self-directed IRAs.

Self-Directed IRA Using a Custodian

This type of IRA allows for an investor to basically instruct the managing custodian in how they’d like to invest. This gives more flexibility in what and how an investor can invest, yet the process and approval is dictated by the custodian of the self-directed IRA.

Because of administrative burdens, many IRA custodians restrict investments in real estate and other alternative investments. Also, because the IRA isn’t a single asset, the self-directed IRA custodians will charge nickel and dime fees for just about every transaction done. For example, owners can expect fees such as:

  1. Writing checks

  2. Wiring funds

  3. Liquidating Assets

  4. Registering Assets for your benefit

  5. Expediting Documents

  6. Delivering Documents

  7. Holding Assets for your benefit

  8. Re-Registering Assets when they’re sold

  9. Research

So, while having a self-directed IRA set up does give more flexibility than a traditional or Roth IRA, the fees and approval processes create restrictions on investing. For some investors looking for limited flexibility, this kind of arrangement provides adequate freedom of investing, within a more structured approach for less risk.

Self-Directed IRA LLC

When an investor wants the ultimate freedom to invest in alternative investments including: real estate, precious metals, and loans; then setting up a self-directed IRA LLC is the best option. This has been a growing investment strategy for the last 30 years, because it gives investors checkbook control with limited red tape and fees.

Investors only have to pay a custodian a couple hundred dollars a year to hold an IRA LLC. This custodian can help them expertly set up their Limited Liability Company, transfer funds into it, and give them checkbook control over investing. The checkbook IRA feature gives investors the ability to invest in what they want, when they want, without the fees and red tape approval processes.

There are only a few prohibited investments, which investors can learn and avoid. This will ensure their IRA LLC enjoys the same tax benefits of any other IRA. With a self-directed IRA LLC investors essentially are making one investment and holding one asset, which cuts down fees to a minimum and makes certain investment opportunities possible, like off-shore real estate.

The main difference with a self-directed IRA LLC is the control investors gain with checkbook IRA. This checkbook allows them to invest as they would with cash, yet still enjoy the tax deferment benefits of traditional IRAs. For instance, cash flow from rent can be re-directed to other investment expenses using checkbook IRA.


Choosing the best way to invest with your IRA is a subjective choice, yet really there’s nothing to lose in setting up a self-directed IRA LLC as one of these choices. Diversifying in this manner will ensure optimal investment flexibility with minimal risk.

Setting up a IRA LLC gives investors more options in investment strategy, and for some savvy investors this is very appealing. Yet, a traditional IRA or a self-directed IRA can also be kept in addition to an IRA LLC, to ensure one strategy doesn’t become affected by the other.

New Standard IRA is the premium custodian to choose to set up your IRA LLC with checkbook IRA. We’re an experienced service with the expertise needed to help clients understand, set up, and maintain their self-directed IRA LLC. You’re welcome to contact us by calling or stopping by our office in Austin, Texas for a free consultation.