Cash out 401(k) for real estate investment?

[Abby Robinson]

Hello fellow BP members! I have a 401(k) that has been sitting for the last 3 years that I haven’t been able to contribute to because it is set up through a previous employer. I’m considering cashing it out in order to add to a down payment we’re saving for this year for our first real estate investment purchase next year. I have about $7,000 in my 401(k). Because I’m in my thirties, I know I’ll pay a 10% tax for early withdrawal, but I’m wondering if it’s worth it since I’m adding the money to the rest of our savings in a high-yield savings account. Open to suggestions and criticisms. Thank you, BP Family!