401k loan for real estate investing

[Eric Ferrer]

Happy new year to everyone! Would like some feedback and perspective on using a 401K loan for real estate investing purposes. Thoughts?

[Eric Ferrer]

@Justin Robert you are right. I should've provided more context. My apologies. To answer you questions, I'm most interested in buy & hold strategies with multifamily and SFRs. 

My current situation is I currently live in Parkland, FL in a one story, zero lot, 3/2 SFR that I bought in a short sale in 2013 for $235k (comps around my area are between $400-450k today). In 2013 when I bought it, I didn't know about REI so I didn't realize what I had at first (Parkland is one of the most desirable areas for families in FL). I ended up refinancing twice since 2013 and took a $44k HELOC on the property as well. Currently my total debt on the property is $357k, 30 yr fixed 3.99% rate on the 1st mortgage and 6.5% fixed rate on the HELOC on a 20 yr term. Most of the equity I took out was put back in to rehab the property and redid that backyard/patio deck,refinished the pool, new roof, new driveway, paint, landscaping, resurfaced kitchen cabinets, etc. My total monthly expenses on this property are $3047 ($1554/m P&I, $206/m HOA, $408/m taxes, $445/m home insurance, $60/m pool maintenance, $36/m pest control (backyard is adjacent to a preserve), $12.5/m AC maintenance).

Also, I have about $130k in my employer's 401k  (don't match) and can loan out approximately $35-40k or so on a 5 or 10 year term depending on what I use the funds for. I currently have a loan on my 401k of $9800 that I used to purchase the house referenced above in 2013. 

the options I have been considering to purchase my next property are the following:

1. buy another SFR as my primary residence and rent my current home (rents for my type of property are anywhere from $3000-$4000/month).

2. stay in my current home, use $401k funds to purchase a multi family (a plex to start out potentially), pay down the HELOC and build up cash to invest in RE.

3. stay in my current home, use $401k funds to partner up with someone, pay down the HELOC and build up cash to invest in RE.

Sorry for the long response. These are some of the options I have been thinking through but I'm sure there are other options and things I'm not thinking about given my experience. 

Any advice is welcomed. 

Thanks!