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Updated 12 months ago on . Most recent reply
401k Withdraw for first REI? Good idea or stay away?
Hello all and thanks for clicking on my very first post! I am super new to REI and excited to learn and expand my knowledge to build generational wealth for my family. I might be jumping the gun here but I am in the early stages of searching and placing my first offer on a property. My plan is buy and hold a long term rental first and then slowly evolve into short term rentals. I do not have a large down payment saved up but I have been considering making a large withdrawal from my 401k, about 35k worth. I know there will be taxes and fees I must pay to do this. Is this a very bad idea? My thinking is this...my 401k is there for my retirement but if I use that money now for REI wouldn't it be building my retirement savings anyways? Why let that money sit there with such a small return when I can use it to start my portfolio? I'm really interested in your thoughts on this. Thanks for your input!
Most Popular Reply
Quote from @Larry M Shepherd:
Hello all and thanks for clicking on my very first post! I am super new to REI and excited to learn and expand my knowledge to build generational wealth for my family. I might be jumping the gun here but I am in the early stages of searching and placing my first offer on a property. My plan is buy and hold a long term rental first and then slowly evolve into short term rentals. I do not have a large down payment saved up but I have been considering making a large withdrawal from my 401k, about 35k worth. I know there will be taxes and fees I must pay to do this. Is this a very bad idea? My thinking is this...my 401k is there for my retirement but if I use that money now for REI wouldn't it be building my retirement savings anyways? Why let that money sit there with such a small return when I can use it to start my portfolio? I'm really interested in your thoughts on this. Thanks for your
Is this a current or former employer 401k? If you can roll it into a self directed ira or solo 401k (if you qualify) then you can make this investment without taxes and penalties.