401k payback vs cashflow

[Ryan Tuleja]

Hey all,

I might have an unusual situation..

My wife and I are simultaneously looking for a cashflowing rental property as well as a home that I can move my mother into. She is on a fixed income, lives in a terrible neighborhood in another state and has no family nearby.

We have recently found a small triplex that has one unit that would fit her perfectly, and COULD cash flow, depending on how we view the following issue.

In order to acquire the down payment, I am planning to borrow against my 401k. This is a 5% payment for 5 years.  now the monthly payment will eat nearly all of the cashflow that this place produces,roughly $100 per door (all interest and payments go back into my 401k minus some small fees).

Would you take a deal like this? 

[Tony Hightower]

I would do it. I meant to say "I am doing this same thing!" Making the offer tomorrow and have already completed the 401k transaction. I will have about the same on net cashflow.