Getting started in real estate

[Allen Collier]

I’m wanting to diversify a little and start investing in real estate. My goal now is cash flow. I did start an LLC, to somewhat protect my current assets which are nearing one million dollars. I have another LLC for my anesthesia practice. My wife works part time, and I would like for her to help me manage rental property and quit her job, and she is on board with this. I am in my early 40’s and I have about $500,000 in an IRA. I max out my 401k at work. I recently changed jobs, and I have $187,000 in my 401k at my previous employer. If I cashed this out, I would pay $56,000 in taxes and penalties, though it may be less since it is a Roth 401k. Leaving me with about $131,000, plus. Would it be a good idea to cash this money out and buy, say, 4 or 5 $100,000 houses or apartments? I have about $16,000 in cash right now. By March, I will have around $23,000 in cash. Being a novice, would you suggest starting slow with a single-family and adding to that over the years? Or, cashing out the 401k and jumping in with a multi-family or several single-family units?