Has anyone taken out a personal 401 K Loan to fund more RE?

[Kuriakos Mellos]

Hey everyone,

I recently began toying with the idea of renting out some of my LTRs into more of a flexible STR model (traveling professionals and furnished units.). The cash flow is 3X in some cases of what I could of made traditionally, and I actually enjoy getting the properties ready and enganging with the tenants. I do not have the bandwith, or the want really, to do traditional Airbnb and VRBO - which seems like too much work and maintenance for me right now. Who knows, maybe that will change with time, but right now I like slightly longer leases with furnished units than the thought of having to go in and clean two times a week between guests.

I have some 401 K accounts, that I was thinking might be a good source to pull out some cash and put that money in a new property where I know I could cash flow at least $1400 to $1500 a month on average.  I am 38, and from what I understand, the loan will just be paid back slowly over time from your pay check. (About 5 years?) 

 Why not take that money and make it work for you NOW, instead of waiting till I am 59.5 to pull it out.    I personally feel that the benefits of getting another unit up and running (tax advantages, almost instant cash flow, mortgage pay down etc) would help accelerate further growth for future purchases of other properties and actually get some instant gratification. (Rather than having a sum of about $50 K just sitting in a 401 K account.) The fact that the loan will start being paid back almost immediately as well is a plus - and will allow that to rebuild itself with time as well.

I would love to hear some feedback/suggestions from others that might have done this.

Thanks,

K-Man