Thoughts on Cashing out my 401k

[Tucker Cummings]

I'm wrestling with cashing out my 401k and I'm wondering if this is something I should do with mine and my wife's 401k. The purpose would be to push it into real estate. Total we have about 70k in our collective 401k. I'm 28 y/o, she is 30 y/o.  

My employer gives a 100% match up to 6% and I max that out at 6%. Her employer does not give a match and we contribute 10% of her pay to the 401k. Overall I'm looking at stocks/401k and we can see a YoY 8%ish return in the stock market for stock funds. But I know I can go buy a deal off the MLS and easily get 30% returns in just cash flow. If I'm doing an off market deal, the returns are even better.

At face value, I'll pay the 30% in taxes and penalties and easily make it back in real estate. So I want to do it, but I'm just wondering if I'm overlooking anything or if this is a bad idea. Just right now the way I see it, I have 70k just sitting there that I can't leverage.

Any recommendations or experiences?

[Basit Siddiqi]

@Tucker Cummings

If you want to take the 401k contribution, you should have taken it out in 2020 where they were removing the 10% penalty if you were impacted by covid.