Updated about 6 years ago on . Most recent reply
Anyone ever use a TSP loan to purchase a rental?
TSP is the Feds 401K. I have been considering taking a loan out to purchase a rental property free and clear. The problem is loan repayment term is 5 years, which pretty much kills any cash flow. The interest rate is only 2.25% and I would be paying my self back.
I had upped my TSP contribution to the legal limits the last few years in anticipation using the funds to buy a rental at some point, but now I realize I should have kept the contributions at an amount that match employer contributions and saved the rest.
Has anyone used this strategy (TSP or 401K loan) to buy an investment home? Were you still able to cash flow? What was the outcome?
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TSP is awesome. We use it to as our "reserve" account. We put 20% down allow us to highly leverage our real estate and continuing investing. So our reserve money in our retirement portfolio and our houses self fund themselves with the tenants paying them off. Just another thought.