Hey BP,
I am in the process of buying my first rental property. I live just outside of Boston, MA and plan to buy a property within 30 minutes of my current residence using FHA financing. I found a couple of deals that could make sense and have confirmed my analysis with a fellow investor to ensure my numbers are correct. This area is loaded with rental properties, but most are on the expensive side.
I have a good amount of cash saved up for the down payment, however, some properties that are just slightly out of my price range have even better potential for ROI.
I wanted to hear some thoughts on taking an early withdrawal from ones 401k to fund part of a real estate investment. Since I am 24, live with my parents, and have very few expenses, I’ve contributed rather aggressively to my 401k for the past 1.5 years and have plenty of money in it. I am aware of the penalties and taxes associated with an early withdrawal but feel that leveraging this money to contribute to a buy and hold rental is worth it in the long run.
Based on the above, does this sound like a reasonable decision or is it short sighted? All responses are greatly appreciated!!!
