401k real estate investing

[Stephen Benson]

Anybody have any references were I can look into more information about using your 401k to investing in real estate?

[Justin Windham]

@Stephen Benson

There is quite a bit of useful information about self-directed IRAs and Solo 401k plans here on Bigger Pockets. You'll find a number of knowledgeable providers responding to your post as well. You can reach out to a few to get more detailed info on which structure would likely work best for you.

The Solo 401k requires self-employment activity, but will allow you to take participant loans while the IRA does not.

A few other Solo 401k benefits:

• Compared to an IRA, Solo 401k contribution limits are roughly ten times higher.
• There is no custodial requirement for the 401k.
• You don't need the additional expense and administration of an LLC to have checkbook control.
• There is a built in-Roth component whereas IRAs are either traditional or Roth, not both.
• A spouse can also participate in the same Solo 401k plan.
• The Solo 401k has additional tax benefits over an IRA when investing into real estate using leverage.
• The penalties for prohibited transactions are less severe, though it's best not to utilize this benefit :)