401K - Should it stay or should it go now... ?

[Michael Garrett]

Evening, Fellow BP'ers:

First let me start by admitting that I recently listened to the most recent podcast with Kyosaki's CPA followed by Kyosaki's episode 500.  Where basically in the first 10 minutes he poo poos on 401K's, living debt free and his "friend" Dave Ramsey.  I loved every minute of it because I tend to agree wholeheartedly.  

A brief history: Found BP about 4 years ago; listened to many many podcasts. I was ready, wife was not. Also had lots of college loan debt. Refinanced house and paid off school loan. Kept working on wife and convinced her that all we need to do is pull the trigger. That was three weeks ago. I pulled a 50K loan form my 401K, and we're under contract on a duplex in Troy, NY!! Whaaaat!!? (numbers attached) Very excited. Not a perfect clean BRRRR but I am in the game! Now I have the taste. Ready for more! Heres the questions:

1)  Should I cash out my 401K?  Roughly 230K, might clear about 140/150.  

2)  Anyone have some experience either doing this or secondhand knowledge? 

3)  What would you do?

Thought process is that this place should make $600/month cash flow.  I pull out the 401K and buy two or three more places this year instead of one more.  Or one bigger place with more upside.  Perhaps get up to 2000/month by end of year.  Wash rinse repeat next year and be at 4000 or 5000/month next year and so on and so on.  Pay tax now and start making some real money instead of waiting another 30 years to get my $3000/month from 401K.  Therefore by end of year two we are pulling in $4000/month plus my salary which would go up about $200/month since I'm not contributing to 401K anymore.  This would also allow my wife to quit her day job and focus on her contracting work a few weekends a month and focus more on our real estate biz if she wants to take a more active roll.  

Would love to hear what everyone has to say.  I know this is a hot topic.  

Oh... the 50K 401K loan is going to cost $800/mo for the next 5 years (I know, I know, negative cash flow but we can easily budget it out between my wife's and my income).  Plan to refinance in 6 months and probably pull 25K out of this deal to reinvest elsewhere.