401K or home equity for multi-unit down payment

[Vincent Buggs]

I am looking to invest in a duplex or triplex. Which is a wiser decision: Pull money from my retirement account or use the equity from my principle residence? 

[Robert Smith]

The first thing to look at for me would be the cost of money. What are the fees and penalties to pull out of a retirement account compared to the cost to pull the equity out of the home. A tax attorney or CPA would be a good one to talk with about this as well. Many investors do not want to tie up their personal home in an investment property however this may be the cheaper and wiser decision depending on your situation. You could always do a cash out refi once you have purchased the property go get the money back for your home or retirement account. One thing to look into would be a self directed IRA if using your retirement account to invest in real estate.