Is it smart to draw early from Roth IRA to invest in real estate?

[David Bittorf]

I currently have about $115k in my Roth IRA. $60,000 is contributions. If I understand this correctly, I think I could pull out $60,000 for a 10% penalty ($6000). If I pull out the whole thing I think I would get hit with 10% + 22% on the gains. So, would it make sense to pull out $60,000 to buy a second property if that means I could rent out my current property for $500 to $1000 / month positive cash flow? Seems like my return on that would be better than the "loss" of leaving it in until I'm 59.5. Btw I'm currently 38 years old.

[Steven Eitreim]

David.
I'm going to be doing exactly that as soon as my current employment ends and I can get access to that cash. While this would give "financial advisors" heart palpitations, my logic is this (by the way, I manage a 1/2billion dollar division of a fortune 100 org).
In the next year or two, the market will experience a necessary correction, and by avoiding that, I'll likely be ahead even after absorbing the 10% penalty for early withdrawal. Now at parity, can I outpace the typical 7-8% ROI I'd get from the market for the next 20 years by investing in real estate? If not, then I'm probably doing something wrong.
I'm confident enough in my skills that I'm cashing in my entire 401K (Roth AND pre-tax), as I will likely do MUCH better over the long run with real estate.

Good luck