my potential investor is transferring $$ from 401K-self directed

[Jason Valchine]

I have a partner investor on this 52 unit deal that wants to roll about 100K into our deal but it currently is in his 401K ... I seem to remember someone saying you can roll it into a self directed and then put into real estate without paying the penalty?  if so can anyone recommend a company to speak with to do this?  He is in Nashville TN.  the deal is in Michigan.  thank you!  

[Gary Parilis]

He can roll it into a SDIRA and can invest from there, though there are complications in doing so. @Brian Eastman is a very helpful resource for some of these details. 

And as @Sean Fillmore says, the CARES act allows him to withdraw up to $100k out of a retirement account any time in 2020 with no penalty and with the ability to pay taxes over three years. It requires that he's been financially impacted by Covid, but the definitions of that impact are pretty vague. He'd be wise to do some reading and talk to an accountant to see whether he can do that.

The advantage of the SDIRA is that his taxes will still be deferred, because he's not withdrawing the funds yet.