Do you guys think this is wise?

[Brian Adzadi]

Hello BP members. I would like you guy's opinion on this. I have been inspired to go in to rental properties. Unfortunately, I do not have the capital to invest. I am thinking of taking out a loan from my 401K and my pension to raise capital. My question is, do you think its wise to borrow money from my retirement in order to go into this investment venture?  The total amount borrowed will be a little over 30K and I will be obligated to pay it over the next 5 years. I am 30 y/o, so retirement is pretty far down from now and I work in healthcare where my job is unionized so I have job security there. What do you guys think?

[Brent Coombs]

@Brian Adzadi, in principle, I like your idea. But in practice, perhaps you're not ready YET? If I was your Lender, I'd want to see that your OTHER savings were in the same sort of league. I'd be much more keen for you to start acting now if you ALSO had at least $20k saved in a normal account.

Another reason you're likely not ready yet is: how will you know when you see a REAL "deal"?

The sweet spot for many cash flowing markets is around $85k (with another $20k in reserves), but if you're fairly much relying 100% on borrowings, the cash flow part of the equation becomes that much harder to remain positive. (Er, why DON'T you have savings?) All the best...