General Solo 401k Real Estate Investing Questions
Questions on using Solo 401k for rental properties.
QUESTION 1) Can we use 401k funds to purchase houses for rental properties?
ANSWER: Yes a solo 401(k) may be invested in real estate. Title to the properties would be taken in the name of the 401(k) plan and all expenses and income flow back to the 401(k) account. This means that all gains would grow on a tax-deferred basis.
QUESTION 2) Does this include vacation type rentals (ie: cabin on a lake)?
ANSWER: Yes.
QUESTION 3) Any restrictions on this?
ANSWER: As the solo 401(k) owner you cannot use the solo 401k owned properties for personal use.
QUESTION 4) Minimum number of properties required?
ANSWER: Any.
To learn more about the solo 401k rules, CLICK HERE.
Comments (1)
Hello Mark,
Would I be able to use solo 401K to purchase real estate from trustee sale auction? Do I just vest the property under the name of the plan?
Would the buying process from auction causes compliance issues with Solo 401K? For example, I would bring $300K of cashier checks to auction, the property starting bid would be $250K, I bid it up to $295K, give the auctioneer $300K of cashier check and he refund me back $5000 in a week and I deposit it back to my Solo 401K checking account.
Thanks.
David C., almost 8 years ago