401k

[Richelle Hatch]

I have a question, I heard that you could use your 401K to buy real estate without having to pay penalties or taxes, is this true?

[Justin Windham]

@Richelle Hatch

Yes, this is true. If you still work for the employer that adopted the 401k, you likely won't have access to the funds to transfer them to a self-directed IRA or 401k. If the 401k is with a previous employer, you would be able to transfer the funds to the appropriate account that allows for investing into real estate. The Solo 401k is the better structure compared to a self-directed IRA (or IRA LLC) as long as you are eligible. Eligibility requires that you have self-employment activity and no full time employees. Otherwise, a self-directed IRA is likely the way to go for you to invest your 401k into real estate.