What Do I do If I Inherit a large sum?

[Wade Alderson]

My father died 2 years ago and left everything to my wonderful step mother. My step mother has made it very clear that the balance of her estate is to be divided 3 ways between my sister, my sisters daughter/my niece, and myself. Part of the estate includes a 401K worth at this time just over $3,000,000. Because the stock market is a scam and I know that IRA's and 401K's are a rip off I am going to take the up front tax hit and cash out and after taxes I could maybe get around $600,000. My question is... when that very sad day comes and my wonderful step mother passes... what would you do with $600,000? I have read "7 Years to 7 Figures" and I like the idea of taking a bit of a short cut and buying the 75 unit apartment, or should I just bite the bullet and go with buying 20 single family homes, or should I think about all the garbage dealing with so many property managers and just take the middle road of "7 Years to 7 Figures" and buy two 20 to 30 unit apartment buildings and just use the cash flow until I can flip them for the 75 to 100 unit apartment building.

My wonderful step mother beat cancer 4 months ago, but now she has no lymph nodes and her doctor told her if she gets sick it might kill her. Right now she isn't feeling well, and if I had hair I would be pulling it out (I shave my head) but she says she is fine (she is a really tough woman and never wants us kids to worry) 

I am ALL ABOUT THE CASH FLOW I don't care about the take the money and party, go on vacation, or any of that other nonsense... I just want to do the right thing with the money, and then hid until my grief passes. And I want to make that happen as soon as I can so that my grief does not get in the way and I do something stupid like buying a condo in Costa Rica and thinking I can start a coffee farm, or even worse a hard wood farm. (20 years for cash flow... are you kidding me?) 

Any advice you can give I would love a heads up, think about this, you need to worry about that, kind of stuff.  

[Wade Alderson]

With respect to everyone who keeps saying "Don't rush in... take a while... ect, ect, ect, ect" did  I not make it very clear that I don't take the loss of a loved one very well and I go into a very dark place shortly after and let my world fall apart until I come out of the other side? 

Also for everyone of you who say to leave the money in the stock market... AGAIN how many of you have been though a down market of 30%, How many of you can say in the last 39 years a loss of 10% or greater has happened, How many of you know what the tax rate will be next year let alone 40 years from now and how many of you know that the cost of a snickers bar and a 16 oz pepsi went up 647% in the last 40 years. 

For the people who said... "Keep the money in, it's stupid to pay the tax up front" google "The Volicity of Money" and see why real financial advisors (remember I had my series 6, series 7, and series 63... I KNOW what I am talking about when I tell people the stock market is NOT what your broker tells you it is.. I Lived It! ) tell you if you win the lottery to take the up front payment with the tax hit and then invest the balance in cash producing assets. 

The US Dollar looses value EVERY YEAR... what use to cost $3,000 40 years ago cost $11,000 today. That is HOW MUCH BUYING POWER the US Dollar lost in 40 years. It could cost me $2,000,000 40 years from now to buy the same things it would cost me $600,000 to buy today.

So does leaving one million devaluing every year US Dollars locked up in a retirement account make sense to you? 

The cost of REAL FOOD went up 23% over the last 3 years... I will bet my very last oreo cookie that over the last three years most people with a "Lump Sum" retirement account seeing that the cost of auto gas, the cost of food, and the cost of energy to run their house was going up like crazy did not stop once to think "Gee.... I better max out my contributions to my retirement account" 

If the cost of REAL FOOD went  up 647% in the last 40 years (you can google how much a snickers bar and a pepsi was back in 1978, and then what it is today, a little trivia for you though... the snickers bars now are much smaller, so you have to get the "giant" one that is the same size as a regular bar 40 years ago, and the pepsi comes in a smaller bottle too) what makes you think that the cost of REAL FOOD is going to go up any less in the next 40

Let me be very clear... I think "Lump Sum" retirement with US money losing buying value EVERY YEAR is a VERY BAD IDEA 

Here is another trivia fact for you to think about. 

When Richard Nixon took America off the gold standard (and it's no surprise that he had to, if you look at the estimated total amount of gold on earth there is not enough even for America to cover the amount of actual printed money, let alone all the "Digital Money" so Richard Nixon saw the writing on the wall... there would be a run on the banks when there wasn't enough gold to cover the money)  created at the click of a moust) August 15th of 1971 the rules of how the US Dollar works in America changed but the thinking of how to plan for retirement did not. 90% of the retirement planners out there are not telling their clients... "The cost of food is going to go up, the cost of health care is going to go up, the cost of housing is going to go up, the cost of nearly everything is going to go up, so unless you are going to work 3 jobs and just shovel money in your retirement account you are not going to have nearly enough, so expect to work until your dying day just like the serfs in Europe in the 1300's." 

It just doesn't happen. 

Biggest joke on the retirement investor was an article that said the average 401K investor today would need to have 1.5 million to be able to retire. Do you know what the monthly cash pay out is after taxes on 1.5 million? Its around $3,000 a month. Is it fair to work your *** off for 40 years and then to have the cost of living go up over 600 percent and then you are expected to live off of less than half of what you were making the first year you started work? 

How does that make sense to ANYONE?

Let me give you an example of how the word does not make sense to people who will not look out side the little box they sealed themselves into. 

I Love my step mother, I adore her, but if anyone has sealed her self up in a box it's her. Anything she has to think to hard about she wants nothing to do with. 

My step mother does not understand why people will buy stuff on Amazon that they can buy at a local store for less. 

She just can't figure it out she thinks people are nuts for buying groceries from Amazon. 

I think the people who want me to leave my inheritance in the stock market are just like my step mother, they are sealed up in a box and no matter what they don't want to learn if anything I am saying is true so because it's so important for me to be wrong they just ignore every thing I say and never check out anything. 

My father retired in 2001 with a yearly income from his 401K of $90,000 using the 3% rule, and when the stock market was done falling down his income from his 401K dropped to $60,000 still using the 3% rule. My fathers 401K only recover it's pay out to $90,000 a year using the 3% rule last year, a year after he had died. It took 14 years for my fathers 401K to recover it's value before the drop. As I said before...  how many cash flowing real estate investors had to wait 14 years for the drops in rent to recover after the housing bubble? 

The stock market is a scam, 401K's and IRA's are a cheat scheme and if you keep ignoring the things I say then you only have yourself to blame if you are invested in a "Lump Sum" account.

Google "John Bogle The Problem With 401Ks" and  read that if you think I am full of garbage

[Deborah Burian]

I personally would spend $500K to pay cash for B/C single family rentals in the Oklahoma City urban core and retain the remaining $100K for an emergency fund.

[Steve Vaughan]

Originally posted by @Wade Alderson:

With respect to everyone who keeps saying "Don't rush in... take a while... ect, ect, ect, ect" did  I not make it very clear that I don't take the loss of a loved one very well and I go into a very dark place shortly after and let my world fall apart until I come out of the other side? 

Also for everyone of you who say to leave the money in the stock market... AGAIN how many of you have been though a down market of 30%, How many of you can say in the last 39 years a loss of 10% or greater has happened, How many of you know what the tax rate will be next year let alone 40 years from now and how many of you know that the cost of a snickers bar and a 16 oz pepsi went up 647% in the last 40 years. 

For the people who said... "Keep the money in, it's stupid to pay the tax up front" google "The Volicity of Money" and see why real financial advisors (remember I had my series 6, series 7, and series 63... I KNOW what I am talking about when I tell people the stock market is NOT what your broker tells you it is.. I Lived It! ) tell you if you win the lottery to take the up front payment with the tax hit and then invest the balance in cash producing assets. 

The US Dollar looses value EVERY YEAR... what use to cost $3,000 40 years ago cost $11,000 today. That is HOW MUCH BUYING POWER the US Dollar lost in 40 years. It could cost me $2,000,000 40 years from now to buy the same things it would cost me $600,000 to buy today.

So does leaving one million devaluing every year US Dollars locked up in a retirement account make sense to you? 

The cost of REAL FOOD went up 23% over the last 3 years... I will bet my very last oreo cookie that over the last three years most people with a "Lump Sum" retirement account seeing that the cost of auto gas, the cost of food, and the cost of energy to run their house was going up like crazy did not stop once to think "Gee.... I better max out my contributions to my retirement account" 

If the cost of REAL FOOD went  up 647% in the last 40 years (you can google how much a snickers bar and a pepsi was back in 1978, and then what it is today, a little trivia for you though... the snickers bars now are much smaller, so you have to get the "giant" one that is the same size as a regular bar 40 years ago, and the pepsi comes in a smaller bottle too) what makes you think that the cost of REAL FOOD is going to go up any less in the next 40

Let me be very clear... I think "Lump Sum" retirement with US money losing buying value EVERY YEAR is a VERY BAD IDEA 

Here is another trivia fact for you to think about. 

When Richard Nixon took America off the gold standard (and it's no surprise that he had to, if you look at the estimated total amount of gold on earth there is not enough even for America to cover the amount of actual printed money, let alone all the "Digital Money" so Richard Nixon saw the writing on the wall... there would be a run on the banks when there wasn't enough gold to cover the money)  created at the click of a moust) August 15th of 1971 the rules of how the US Dollar works in America changed but the thinking of how to plan for retirement did not. 90% of the retirement planners out there are not telling their clients... "The cost of food is going to go up, the cost of health care is going to go up, the cost of housing is going to go up, the cost of nearly everything is going to go up, so unless you are going to work 3 jobs and just shovel money in your retirement account you are not going to have nearly enough, so expect to work until your dying day just like the serfs in Europe in the 1300's." 

It just doesn't happen. 

Biggest joke on the retirement investor was an article that said the average 401K investor today would need to have 1.5 million to be able to retire. Do you know what the monthly cash pay out is after taxes on 1.5 million? Its around $3,000 a month. Is it fair to work your *** off for 40 years and then to have the cost of living go up over 600 percent and then you are expected to live off of less than half of what you were making the first year you started work? 

How does that make sense to ANYONE?

Let me give you an example of how the word does not make sense to people who will not look out side the little box they sealed themselves into. 

I Love my step mother, I adore her, but if anyone has sealed her self up in a box it's her. Anything she has to think to hard about she wants nothing to do with. 

My step mother does not understand why people will buy stuff on Amazon that they can buy at a local store for less. 

She just can't figure it out she thinks people are nuts for buying groceries from Amazon. 

I think the people who want me to leave my inheritance in the stock market are just like my step mother, they are sealed up in a box and no matter what they don't want to learn if anything I am saying is true so because it's so important for me to be wrong they just ignore every thing I say and never check out anything. 

My father retired in 2001 with a yearly income from his 401K of $90,000 using the 3% rule, and when the stock market was done falling down his income from his 401K dropped to $60,000 still using the 3% rule. My fathers 401K only recover it's pay out to $90,000 a year using the 3% rule last year, a year after he had died. It took 14 years for my fathers 401K to recover it's value before the drop. As I said before...  how many cash flowing real estate investors had to wait 14 years for the drops in rent to recover after the housing bubble? 

The stock market is a scam, 401K's and IRA's are a cheat scheme and if you keep ignoring the things I say then you only have yourself to blame if you are invested in a "Lump Sum" account.

Google "John Bogle The Problem With 401Ks" and  read that if you think I am full of garbage

 Definitely an interesting view on things.  I've enjoyed it.

I'm also an old series 7 & 63 guy so I get what you're saying. On one hand,  though, this 'scam' of a 401 got up to a balance of $3M. Just sayin'. 

I would really look into finding a way to keep it under its retirement cloak to avoid the 40% haircut. A few ideas might be a SDIRA, solo 401, self-directed SEP if you have a business... 

Fully explore options to delay/defer the tax hit while still allowing you to divest into your preferred asset class!

[Wade Alderson]

@Steve Vaughan hypothetical question for you after a bit of background.

My question to you is.... "How why do you think people buy into the lie that deferring a tax hit is the best option?"

The creator of the 401K, Ted Benna, himself called the 401K a horrible idea and he regrets having anything to do with it. 

If the creator of the 401K HATES it and called it a monster why do people think it's so great?

[Steve Vaughan]

Originally posted by @Wade Alderson:

@Steve Vaughan hypothetical question for you after a bit of background.

My question to you is.... "How why do you think people buy into the lie that deferring a tax hit is the best option?"

The creator of the 401K, Ted Benna, himself called the 401K a horrible idea and he regrets having anything to do with it. 

If the creator of the 401K HATES it and called it a monster why do people think it's so great?

I didn't say it was so great, only that there's $3M in there. Kind of oxymoronic. "This scam has $3M in it!" LOL

Lose the 40% off the top if you want. I'd explore options to minimize that while still gaining control of what I buy.  Good luck.

[Anita Ahuja]

Vegas baby vegas
;)

[Mike Dymski]

Regarding withdrawals and taxes, consider a Roth conversion ladder versus a lump sum distribution in one year in the highest tax brackets, plus the 10% penalty.

If you plan to have no taxable income, you can convert $12k per year tax free to a Roth and another $38k (unmarried taxpayer) or so per year in the 10% and 12% tax brackets and no 10% penalty.  Five years from each yearly conversion, the transferred amount can be withdrawn penalty (and tax) free.  0-12% in federal taxes versus close to 50% in taxes and penalties...few investment vehicles will beat those returns.

This strategy won't work for everyone's situation but it does for many, particularly those who have enough savings to live on and who can control their taxable income from other sources.

[John P.]

A general rule of life is never pay tax if you can legally avoid it. As others have said why not roll the money to an Ira and then do a self directed Ira to buy real estate? I understand you are scared of the stock market and I don’t blame you. It’s not for novices. However, with a self directed Ira to real estate you can have zero equities. I don’t see how that could be bad. You then have your full share working for you rather than your full share minus tax if you take a lump sum.  Let’s say it’s $1m so $1m to invest v $600k if you do your plan!?  You then take your irds each year and pay the tax each year. On a $1m Ira at your age the ird might be about $30k. You could take more of course. Then you pay the tax at a lower marginal tax rate each year rather than all at once. If all at once you would Be in the highest tax bracket. That simply doesn’t make sense to me. 

[Wade Alderson]

@John P. Maybe I am confused, but how I understand self directed IRA's the only benefit is that you have more control over what your money is invested in, So just like how your monthly dividend stocks monthly pay outs are reinvested in your retirement funds rents from properties go back into your retirement fund.

If I am wrong about that let me know, I am all ears. 

So here is what I did, I did ALL THE MATH of leave the money in an IRA and do the self directed thing with most of the money, talking out the RMD that is predicated on my fathers age, or take a lump sum and pay taxes.

Because the rents in self directed IRA's have to be allocated to the IRA, the properties don't do anything to improve my quality of life in the hear and now.

Now if I am right about the rents .... pull out an inflation (AKA devaluation of the US Dollar) calculator and go back 40 years and put in what ever lump sum retirement account you want (in my case I did the $600,000) and look at how much you would have to have today to make up for the loss of buying power over the number of years you have to wait until you can legally take the money out of an IRA with out the penalty.

Another thing for all of us to think about (and some people are just greedy so they can never rap their head around is point), 

"What Is Your Exit Strategy" 

Meaning as cash flow investors how much do you need coming in a month in real honest to GOD spendable money  to be satisfied?

For me personally It's $20,000 a month, but I would be fine with $10,000 a month if I knew in like 10 years the cash flow would dubble. 

But that is just me... my exit strategy has been $10,000 a month will do but shoot for $20,000 if you can, but stop there... because the study about the tipping point for when having money makes you think you deserve more respect than you earned is like around $23,000 to $25,000 adjusted for inflation. 

Here is my personal view of how I see things... no matter how much money I have, I always follow the blue print laid out in the millionaire next door. That life styles of the rich and famous thing is not for me. So if all I have to do is project a upper middle class life style that allows me to do what I want, when I want, go where I want. Why would I try to make more than that?

I mean I am so set in my ways when my wonderful step mother told me I should take my inheritance and buy a home in Golden Oaks the Disney HOA in Florida , I told her thanks but no thanks because of the $5,000 month HOA.

You want to know what part of my exit strategy is? As much as @Jason Hartman hates them I want to buy a 3 bed 3 bath luxury condo in either Orlando or Jacksonville Florida. For all the garbage you go through with HOA's and the really self important people in charge of it... I just like the idea that if the roof and siding come off in a hurricane someone else is responsible for it, a lot of people might not like it when the maintenance fee for the year goes up, but the way I see it... I am not the only one footing the bill. Maybe when I move there I will change my mind and regret it like crazy because Condo's are so hard to sell on the secondary market (and HOA's are notorious for making a "No Renters" policy out of the blue... I wonder if you can get around that with a "Rent To Own" kind of thing?) but for a guy who wants to do the 12 cruises in 12 months kind of thing... I think that a place where it's not noticeable when I am gone is a good place to live.

[Jason Hartman]

Condos might be okay IF the deal is good enough but SFRs are best. 

[John P.]

Originally posted by @Wade Alderson:

@John P. Maybe I am confused, but how I understand self directed IRA's the only benefit is that you have more control over what your money is invested in, So just like how your monthly dividend stocks monthly pay outs are reinvested in your retirement funds rents from properties go back into your retirement fund.

If I am wrong about that let me know, I am all ears. 

So here is what I did, I did ALL THE MATH of leave the money in an IRA and do the self directed thing with most of the money, talking out the RMD that is predicated on my fathers age, or take a lump sum and pay taxes.

Because the rents in self directed IRA's have to be allocated to the IRA, the properties don't do anything to improve my quality of life in the hear and now.

Now if I am right about the rents .... pull out an inflation (AKA devaluation of the US Dollar) calculator and go back 40 years and put in what ever lump sum retirement account you want (in my case I did the $600,000) and look at how much you would have to have today to make up for the loss of buying power over the number of years you have to wait until you can legally take the money out of an IRA with out the penalty.

Another thing for all of us to think about (and some people are just greedy so they can never rap their head around is point), 

"What Is Your Exit Strategy" 

Meaning as cash flow investors how much do you need coming in a month in real honest to GOD spendable money  to be satisfied?

For me personally It's $20,000 a month, but I would be fine with $10,000 a month if I knew in like 10 years the cash flow would dubble. 

But that is just me... my exit strategy has been $10,000 a month will do but shoot for $20,000 if you can, but stop there... because the study about the tipping point for when having money makes you think you deserve more respect than you earned is like around $23,000 to $25,000 adjusted for inflation. 

Here is my personal view of how I see things... no matter how much money I have, I always follow the blue print laid out in the millionaire next door. That life styles of the rich and famous thing is not for me. So if all I have to do is project a upper middle class life style that allows me to do what I want, when I want, go where I want. Why would I try to make more than that?

I mean I am so set in my ways when my wonderful step mother told me I should take my inheritance and buy a home in Golden Oaks the Disney HOA in Florida , I told her thanks but no thanks because of the $5,000 month HOA.

You want to know what part of my exit strategy is? As much as @Jason Hartman hates them I want to buy a 3 bed 3 bath luxury condo in either Orlando or Jacksonville Florida. For all the garbage you go through with HOA's and the really self important people in charge of it... I just like the idea that if the roof and siding come off in a hurricane someone else is responsible for it, a lot of people might not like it when the maintenance fee for the year goes up, but the way I see it... I am not the only one footing the bill. Maybe when I move there I will change my mind and regret it like crazy because Condo's are so hard to sell on the secondary market (and HOA's are notorious for making a "No Renters" policy out of the blue... I wonder if you can get around that with a "Rent To Own" kind of thing?) but for a guy who wants to do the 12 cruises in 12 months kind of thing... I think that a place where it's not noticeable when I am gone is a good place to live.

I think you have bad info. You can take out whatever you want from the IRA each year. You will just pay income tax upon the distribution. The key point is that your purchasing power is significantly more than if you take the lump sum and then invest. You pay tax either way but better to pay over time than all at once. Also, your distribution should be on your life expectancy if I am not mistaken. I am pretty familiar with inherited IRAs and all the ones I have seen you get your life expectancy. I encourage you to revisit that issue with a tax professional.

[Wade Alderson]

@John P. Thanks for the feed back I forgot to tell you that my fathers 401K is a real stickler, it has rules that say the pay outs have to be based on the expected life time of the original contributor. Since my father was 71 when he died and the paperwork for the 401K said he would be lucky to make it to 88 since he was a smoker, the RMD is based on their rules even if I roll it into an IRA. Not kidding... that's the rule Or I can do a 100% pay out. My fathers company was one of the first to start a 401K, it' also has made the news numerous times for it's outlandish and ridiculous 401K rules been sued many times and won every court case because the rules are in the paper work that the original contributor signed. Now yeah... my fathers RMD calculated withdrawal factor is something like 22.3 to 24.8 depending, I can't remember and I don't know what it means because Yeah.. I worked in the stock market... but no I was not in the 401K division (Good thing to, because I was probably the only person on the floor who read every prospectus in the mutual series cover to cover. It's just Amazing what they hide in between the boring stuff, it's worse than the US Government putting business tax codes that give breaks to big business pharma in the farm bill).

Now again... I don't understand the way you get your rental cash flow out of your self directed IRA, and if anyone can explain that to me (from my understanding, the positive cash flow from rent goes right back into your self directed IRA so how does that improve your quality of life BEFORE you retire?

Now granted... if my inheritance was a much smaller amount and I already was doing the "Flip I high End Car, put a down payment on a cash flowing property" thing going on. Yeah maybe a self directed IRA used to accumulate additional properties if that was my only choice would be the way to go.

But the way I see it... even with a HUGE tax hit it's STILL a whole lot of money. 

I mean thing about it this way.... there you are one day in your life, you have read @Brandon Turner's "7 Years to 7 Figures" like 100 times and you don't care if it takes 20 years it's your life dream to prove if this can work or not. And some how, some way you get a check for $600,000 after taxes. Are you seriously telling me that if you had a chance to take a short cut to no longer having to work by investing $500,000 as the down payment on a 75 to 100+ unit apartment with after all taxes and cost of business cash flowing $200 per door, that you would say... "On but if I wait I can take out $30,000 a year til I die?" 

Is that what you are seriously saying? 

You would rather make $40,000 a year than $15,000 a month? 

I told you guys I did the math.... (here is a hint.... $15,000 a month comes to $180,000 a year before taxes... $40,000 a year... $180,000 a year) 

Now thankfully this is all a mute point my step mother spent the night in hospital and they let her go  this after noon with a clean bill of health. 

So I am not in a panic any more, but one day this will happen (hopefully after the recovery of the next stock market crash that is about due, if you google something like "how often does the stock market drop" you see a LOT of different reasons why the stock market dropped, but looking at the graphs it looks like the longest time between crashes is about 10 years... scary!) and by that time I hope I can decide if I want to take @Jason Hartman's way of doing things and just go head first into SFH or if I am going to go the way of Brandon Turner and go the small apartments.

Hopefully I will have a LONG TIME to make up my mind and the next stock market crash does not wipe out my fathers 401K (He lost over $1,000,000 in the last crash and only JUST now has the account recovered back to it's balance before the 2008 crash. )

[John P.]

@Wade Alderson I would say with 99.999999999999999999999999999999999999999% certainty you are wrong about the 401k. Earlier you mentioned the money had to be taken out of the 401k and now you say it maybe can be left in or maybe taken out!? Either way, once money is taken out of a 401k and moved to an IRA I am not aware of a law that would allow the 401k plan to dictate what happens in the IRA. I don't believe money rolls with any restrictions. I would research that so you know what your options really are because your concept sounds wrong to me.

As to taking money out of an IRA you take out your RMD (whatever that is) and you can take out more money, up to the whole thing, each year. The amount you take will be subject to income tax. I am not aware of any difference if it's a self directed IRA or a more traditional IRA invested in stocks or mutual funds.

I won't say more as it's clear you are very stuck on your plan and believe you know everything.  I would simply suggest you find a really good tax advisor to assist you rather than knuckleheads like me that are just spouting info for free.

Good luck to you.

[Will G.]

more math is necessary here. $180k of net requires you to find a $2million property at a 9% cap rate, which is mobile home park territory, not largish multifamily. Then you have to subtract debt service of $93k on your $500k down model. That leaves you with $87k cash flow. The reality is you will be lucky to find a 7% cap which will cash flow $47k on a $2m purchase(after debt service).

The other thing is you can only borrow up to about your net worth to purchase a multi, not sure on mobile home park though

Most people wont be happy simply "not working". Humans need purpose, a sense of community and need to feel needed, as well as "giving back". Psychologically speaking, we are healthier when we make these things goals, instead of monetary benchmarks

[Wade Alderson]

@Will G. I think you put the final nail in this coffin if what you say is true. I will just buy SFH if that's the case.

[Wade Alderson]

Because I can't help but poke a sleeping bear to see the surprise on it's face... for all of the people who were saying it's better to keep the money in a retirement account. Did you happen to see the news this morning on the CNBC webpage that the JP Morgan co President warns of deep correction for stocks totaling as much as 40%? He said we could get by for a year or two but after that it's bound to happen. It's a really good article I highly recommend you read it. 

[Jack Martin]

@Wade Alderson If your plan is to invest in real estate, I agree with @Mike Dymski that the best way is just get started.  Choose the asset type and strategy that makes the most sense to you and start with one property.  Everything you can learn here on BP, in books, seminars, and the like is just theory until you have a property to apply it to.  You will find that once you are an owner of a property, the advice from others will have more value.  While you are acquiring your first property, it would be smart to align yourself with others, both here and locally where you live, who are active in the asset class you've chosen and can share guidance.  There is an incredible amount of experience and powerful advice available on BP.  Some of it will align with you and some will not, but it is always best to remain respectful.  

[Dan Carver]

This is not tax or financial advice. You know you can buy real estate in a self-directed IRA, right? You need to consult a CPA as it may be better financially for you to withdraw the money over multiple tax years instead of just in one year. You are going to get slaughtered with taxes. You could put the IRA money after being inherited in CDs if you want, take out withdrawals as you acquire properties, and lower your tax burden costs by spreading it out over a few years.

[Wade Alderson]

Thank you for your feed back @Jack Martin I see the wisdom in what @Mike Dymski said, only as soon as I come into the money from my inheritance I am not staying here I am at for all the money in the world. I am moving to Florida. So would it be a good idea to go to a local real estate investment group meet up here in Oklahoma if I don't want to own property here, and  if where I am moving the market would be different? 

[Wade Alderson]

With respect @Dan Carver did you read about how the Co President of JP Morgan said to expect  40% drop in the over all stock market in the next few years? Would you still suggest someone stay in the market knowing that like around 3 of the big wigs are saying to expect a crash of 20 to 40%? 

[Dan Carver]

Wade, did you read my entire comment whereby I said you could keep the IRA money in CDs? Maybe you don't understand that IRAs can invest in anything, insured money market, CDs, cash, bonds. Please explain how a 40% drop in the stock market would cause your CDs to lose value if you kept your IRA

[Wade Alderson]

OK, so for those of us that did not know (I myself did not know this because GOD knows I would have nipped all this nonsense about leaving the money in a retirement fund in the bud when it started) IT IS THE LAW that when you inherit a 401K as a non spouse you need to pay an inheritance tax on the total amount the next tax filing anyway. So according to the accountant my sister talked to it would be unwise to be forced to liquidate the 401K pay taxes on 100% of your inheritance, and then put the remainder back in an IRA that prevented you to get your hands on the money if you are under 59 & 1/2.

This dear readers is why YOU CAN NOT TRUST what you find on web pages (even motley fool missed this point... had I googled "do you pay inheritance tax on a 401K" I would have saved myself a lot of head ache) 

After my talk with the Great and Awesome @Jason Hartman today I am no longer confused about the question I actually asked about should I invest in apartments or single family homes... I am donating all my other real estate investing books to the Goodwill and I am only keeping my books where I don't need a commercial loan for the first 10 properties. 

[Jason Hartman]

 It was great talking with you, @Wade Alderson.  Hats off to you for doing such great research too!