Cash out 401k to further invest in CRE?

[John Harvey]

40 yrs old and currently own about $2M in single family investments which generate about $144K/yr. gross. Have aggressive 15 yr. mortgages on them with about $600K paper equity. Most of these loans are fresh so no equity to tap at the moment.

Have a career earning +$200K/yr. as well.

With a 401k balance of about $410K, I’m bored with the retirement account concept and considering cashing it out, paying the taxes and penalties to create say +/-$300K of liquidity to pump in to more investment real estate. $300K should allow me to buy +/-$1M of new real estate assets. Most likely value add plays, creating additional forced equity, and then stabilizing assets with tenants and cash flow.

Thinking I can way outperform the 401k, if I stayed the course, over the next 25 years.

401k is tracking to have a value of $1.2M at retirement age. $300K invested today earning just 8% per year is worth +$2M in 25 years, plus 25 years of the cash flows shielded by depreciation.

Seems like a no brainer. Anybody done this or thinking about doing this that can share their analysis?