Pulling 401k early to invest in real estate?

[John Gach]

So I just opened my business a year ago, before I opened up I worked for a business and was putting money in my 401k.  Since I left the company I worked for, I never moved my money out of the 401k, and never put money into it.  Because I want to get into real estate investing in doubles, I kinda want to pull out my 401k, which I know will take a 10% hit for taking it out early, and I will have to pay taxes on the amount, but I think it would be better off being used to invest in real estate, it would be less risky in my eyes, not sure how other people feel about this.

I want to get into real estate investing, I want to buy a double as soon as I can, but being a new business, taking advantage of all the tax right offs I can, looks like I am making less money than when I worked for the company I left.  I just finished my first full year operating, and I did well, I have more money in the bank than ever before but I also look like I made a lot less.  So not sure if I will be able to get a mortgage because of this, or if money in the bank will help?

[Joseph Salegna]

@John Gach Have you considered opening a Self Directed IRA or Solo 401k? You could roll over the 401k into one of these products and avoid the 10% penalty? There are plenty of providers on BP that could help.