Cashing out 401K for down payment or full payment

[Anestis K.]

Hey Bigger Pockets.... I had an idea and need your opinion.  I just closed on my 7th property, and for the first time made two purchases in one year.  Unfortunately, my cash reserves for down payments are gone but I don't want to wait till I save up another 25% that the bank requires for a loan, so here is my plan.  

I want to cash out some of my 401K to use either as down payment or full payment for another unit.  I understand that I would get penalizes 10%, and I would have to pay tax on the money as extra income, but if I find a real estate investment that has a return of 8-9%, I can have the 10% penalty paid back to me on the first year of owning the property and then I can utilize the future returns right away rather then waiting till I'm 62 with 401K.  In addition, I can boost my 401K contributions after the first year to catch up again since I'll have the 8-9% return from the real estate investment. 

Let me know your thoughts, and also any idea to get down payment  (The bank doesn't want to know me unless I have 25% down payment)

Thank you