Using TSP to help with down payment

[Hill A.]

Hey everyone, First I'd like to say that though I don't post much, I'm always browsing and thank everyone for the wealth of knowledge on the site. I have a somewhat unique question that wasn't quite answered by anything I found in my search queries and I'm hoping you all can help. Here is my situation, as brief yet inclusive as I think it needs to be so you can see my situation. I own one rental property in NC (previous residence that wasn't bought to cash flow, but I shopped around and worked numbers to fudge 150$ cash flow out of it). I'm currently stationed in CA and after 7 months finally found a deal on a new personal residence that will also work as a long term hold rental when I move out... We close on this in two weeks. I've been studying this and saving for a few years, and 2017 was going to be my real jump into purchasing SFR's to work my way towards multi family. So I want to keep as much of my saving around for that as possible. My first residence is tying up my VA entitlement and I don't have the equity to refi so I'm using a 5% conv, buyer paid MI on this new residence. With the exception of my earnest money I'm still going to need about 20k for down payment and closing costs. I've got 50k in a money market account making .5% And 17k in a TSP (traditional) making about 1.6%. My endstate is to have as much money as possible available to begin buying SFR's next year so I am debating using a TSP residential loan to cover 10k (max allowed) of the down payment that I need. This will keep much more money in my money market available to use on non owner occupied properties... Additionally -the way I understand it, I pay interest back to myself at the g fund rate (which I'm invested in solely). Replacing my current TSP contribution with the loan repayment I would pay this back in 2.5yrs. I invested in the TSP solely because I was young and didn't know about better alternatives (thus why I've been invested in the g fund solely for 9 years- yes I will move my funds around next time the market dips hard but for now I don't want to buy into the other funds)... Anyway, after 9 years and ten percent of base pay I'm only looking at 17k in this account so I figure I can put that money to better use elsewhere. Am I missing something here? It seems cut and dry to me that using my TSP will keep more of my actual cash in hand to use on much higher returning investments, but I want to hear the input of the professionals who have more than my one measly unit!