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Updated about 9 years ago,
Planning a RE strategy for both 401k and personal investment
Hello, I'm hoping for some advice on an investment strategy for both my 401K and personal property.
A little background: I'm single, 50 and have 2 kids with me part time (not claimed as dependents).
I'm employed full time with roughly 45k gross income, have about 20K in savings and 260K in an IRA that I could roll over to a self directed or solo 401K. I have a smaller match 401K with my employer, but can't do anything with that unless I cash it out. I own my well-maintained home in a great location with 30K left on the mortgage (house is worth 85K), monthly payments of $550 with a 2.75% ARM. No car loans but have about 4K debt on a 0% credit card.
My plan is to rent my current home at $800/month, buy a second property (duplex or triplex) up to 100K with a conventional 3% loan with 10% down (already talked to my bank about this) then live in it and rent out the other unit(s). The place can't be a rat trap that I spend a lot of time/money fixing since a. full time job, b. kids and c. limited mechanical inclination. I'm not sure what the numbers for the rents would have to look like to make this work.
I want to use the solo 401K (once I've rolled it over) to either buy real estate and/or notes but since I'm not exactly a savvy investor I don't know where to start with that. I'm also not sure what the advantages/disadvantages are to buying property with personal savings vs using a solo or self directed 401K.
Thanks so much in advance for any and all suggestions!