401k to solo 401k from previous employer

[Kumar Gaurav]

Hello

I have 401k from my previous employer and instead of maintaining a SDIRA I wish to invest in real estate perhaps on a owner occupied multi family if that's feasible( if not at least on an investment property,) I also currently own a rental income property and also planning to start an LLC for software consulting with one or more employees.i would like to know what would be the best way for me to strategize so I can invest in real estate using 401k from my past employer.

[Justin Windham]

@Kumar Gaurav

You could transfer the 401k to a self-directed IRA or Solo 401k. The Solo 401k would require self-employment activity (such as your software consulting) and that you do not have any full-time, non-owner employees. Part-time employees or independent contractors are ok.

With either structure, there are prohibited transaction rules that will generally require you to keep your retirement account activities completely separate from your own activities. For example, you could not live in a property that is owned by your self-directed IRA or Solo 401k.