What’s the best way to leverage 401K’s to buy rental properties?

[Tom Arttus]

Hi BP group,

I, and I'm sure many, have a lump sum of money in a 401K/IRA. I currently have my money is a self directed IRA and use it for hard money loans. I flip the funds and do well with this strategy. However ideally I'd like to take it out of my 401K (without penalty?) and invest it in real estate. I know I can invest in real estate inside of my 401K, but than I don't see the cash flow now. While I'm not looking for a quick fix per se, I am looking for cash flow so my wife and I can leave our W-2 job and spend more time with the kids/family.

Podcast, books, advise all welcome.

[Nick Barlow]

@Tom Arttus 401(K) loan. The interest goes to yourself. Have to check your plan, but most seem to have limits of 50% of the balance, or $100k, whichever is lower.

After a year (at least with my employers plan) you can repay lump sum.

Something else I think of (and I’m not a financial advisor and this isn’t financial advice) is that the market is due for a correction, however, you loan and repay in dollar amounts, not shares. If you loan today, at highs, then the market drops, then you repay at depressed prices, you’ve protected your portfolio from a loss while selling high, buying low, and adding a rental to the portfolio 🙂.