Is cashing out a 401k brave or stupid?

[Kristen Martin]

My husband and I have separate 401k accounts through our jobs. The current balance on them combined is around $140,000. We're contemplating cashing them both out to invest in multi-unit rental properties. After tax and penalty...we'd have just over $90k. Are we being brave....or stupid?

[Diane G.]

I did that, cashing out 401 to buy a property, back in 2008.... I got hit a tax penalty of $38K at year end that I had to take a payment plan with IRA... Paid off in 3 years PAINFULLY.... But today, I am sitting on ~$600K appreciation plus $1500 NET cash flow each month.... So, you tell me... lol