Taking out money from IRA

[Doug Underwood]

Does it ever make sense to withdraw your money from an IRA before retirement to invest it in real estate? I know there is a 10% penalty plus it is taxed as income, however I would be able to invest the money in multi-family now and receive the income now rather than wait until retirement which is not for another 25 years. Right now I am torn on whether I should take the penalty to buy multi-family (8-10 units) or go the self directed IRA route buying rentals and not see any of that income for years. One reason I have been even considering this is a friend who did this and purchased many rentals that are now worth significantly more and he gets rental income. Also this is not the only retirement account, my wife and I have a profit sharing plan through my business that we regularly contribute to and would not touch. Any advice would be appreciated.