Re-allocating 401k contributions to real estate

[Tim Grillot]

My wife and I have purchased two rental properties (a tri plex and a duplex) in the last several months. For these first two we used savings for the down payments. Our long term goal is to have a portfolio of cash flowing rentals to help us get to early retirement 5-10 years. Our first two deals are going great and we love doing this. We have been maxing out our 401k contributions for the last number of years. We are considering lowering our contributions down to 6% to still get my company match, but then use those extra funds that used to go toward our 401k towards real estate. We know we would be giving up the pre-tax benefit, but we both like and trust the real estate end way more than the 401k. So to utilize that money we would do one or several of three things; take the extra money every paycheck and save it until we have enough for a down payment on another property, or use our HELOC for down payment on deals we find and then use the extra money from every paycheck to pay down the HELOC, or negotiate seller financed down payment and use the extra money from our 401k allocation to pay down the sellers note.

Thoughts/opinions?