Absolutely. No matter which IRA you choose, it will need to be held by a custodian. Self-directed IRAs are typically held by specialized Self-Directed IRA custodians.
Self directed IRAs come in two basic flavors: the Custodian model and the Checkbook Control model. In the standard Custodian model, the investor has the capability to invest in alternative assets; however, the investment process itself can be a bit of a hassle. After identifying a desirable asset, the investor must fill out a custodian form, send it in, wait for authorization, wait for a check to be sent, and then use the check to purchase the asset. The process then repeats itself for every transaction or modification following the original purchase. In a Checkbook Control model, the investor is able to purchase the asset immediately just by writing a check. There are no forms to fill out and no long waiting periods in the investment process.
Only if you consider saving money a benefit. When you have to go through the Self-Directed IRA custodian to perform your transaction, you will be paying a transaction fee for everything you do. With Checkbook Control, you will pay ZERO transaction fees. The reason for this is that you’re performing the transaction yourself by writing the check and you’re not using the services of the custodian to do it for you.
It’s actually quite easy. The only additional step that you would be responsible for is going to the bank of your choosing and opening a new checking account. After that you’re ready to go! Find your asset and purchase it just by writing a check.
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