Self-Directed Solo 401k Rehab Real Estate Question
QUESTION: If I buy a flip house in the name of the solo 401k but I need to use some personal funds to complete the rehab and sale, can I get reimbursed for the personal expenses or must all sale proceeds go back into the self-directed solo 401k?
ANSWER: If you purchase a property with your Solo 401k, you cannot use personal funds to pay any expenses related to the property. Instead all of those expenses must be paid with funds from your Solo 401k.
Alternatively, you can purchase a property using both personal (non-retirement) funds as well as retirement funds in your Solo 401k via a tenancy in common. Among other requirements, this would require that you purchase the property with personal funds and retirement funds (contrast this with what you describe in your email below where you purchase the property first with only Solo 401k funds and then later want to introduce personal funds).
For more information about various ways a solo 401k can be invested in real-estate, please CLICK HERE.
Comments (2)
what kind of document that needed and does your company provide assistant for this kind of transcation
Julian Yu, about 9 years ago
As long as you are self-employed and have no full-time employees, you may qualify to open a self-directed solo 401k plan.
Mark Nolan, about 9 years ago