What would you do with my 30k?

[Ben Cochran]

I'm not sure how to proceed with the funds I have available and hope to get some advice from all the great minds here on Biggerpockets. I live in the Northern Colorado Fort Collins / Greeley area. I am looking for my first investment opportunity. I have roughly $15,000 in an old 401k and about $15,000 in my current tax return. I'd like to combine these somehow to give myself approximately 30k to work with. My goal is to flip 1 or 2 properties a year in order to purchase buy and hold rentals. With an end goal of 15 to 20 rentals within 10 years. I'm considering rolling my 401k into a self directed IRA and maybe combining that with my tax return that way. I'm no tax expert so I'm not even sure if this is possible. In order to get started, I am open to purchasing a multi-unit and moving into one of the units or flipping a SFU to gain more capital. But on the flip side, I just read that I can't live in anything that I purchase with IRA funds. Does this apply to a multi-unit? So basically how would everyone handle this financial situation? I know it's a lot of questions, so I thank everyone in advance for their patience and input.

[Account Closed]

@Ben Cochran First I am not a lawyer and am not giving you legal advice. I am just sharing what I have learned and been taught on this subject. I have a self direct IRA myself and do private lending with it. Actually, I set up an LLC in my self direct IRA and am considered the manger of this LLC. However, 100% of the LLC is owned by my IRA, not me. As I understand it, any RE purchases you make using self directed IRA money are not in your name they are in the name of the IRA or your LLC within the IRA. All of the profits made using IRA money stay within the IRA account. You *cannot* commingle money inside your IRA with you or your money outside your IRA. If you were to purchase a fix n flip say with your IRA, you personally can not lift a hammer or work on it yourself - at all! You would have to hire people to do that. Essentially, that asset belongs to your IRA and not to you personally. Mess with the Government rules of using IRA money for these purposes and the Government could consider it like you took all the money out for your own use prematurely and will tax the entire account and penalize you for early withdrawal. If you do self direct your IRA for these purposes, be sure to check these things out with the custodian of the IRA first. I think companies like Entrust do such things and provide training as well for RE investors.