Do you use your 401K money to invest in real estate?

[Tamar Hermes]

I have been investing 401K funds through a self-directed DB plan in my company for a while, but now I have different 401K money coming in and wondering who uses retirement accounts with traditional stocks and who is investing in Real Estate? I am also curious about what strategies you are using and how you have set up self- directed accounts with funds in your name as opposed to a company.

[Daniel Dietz]

My three partners and I use both our SDIRAs and SOLO401Ks to invest in buy-n-hold rentals. Each of our self directed accounts are 1/3 owners of an LLC. It is actually that LLC that holds the properties, and our respective accounts are own a share of the LLC.

One of the reasons that we choose to do real estate in our retirement accounts is because that is where 80%+ of each of our assets ALREADY were sitting, so we each did 'roll overs'.

We also own rentals outside of our self directed accounts. Within those accounts, we look at it as 'what can make us the best returns (meaning stocks, bonds, REITs, real estate etc... ) and keep volatility low? For us, that is real estate.

The reason we do both SDIRAs and SOLO401Ks is that when we rolled funds over, ROTH IRAs are about the ONLY kind of account you can not roll into the new SOLO401K.... but you ARE allowed to roll them into a Self Directed IRA.... stupidist law I have ever seen ;-)