Originally posted by @Justin Reyes:
Hello my name is Justin Reyes and I’m 30 years old. I been working for a company for only 3 years and have about $30k vested in my 401k. I want to take it out and buy my first property to possibly hack or 1031 exchange. I know it’s risky because I don’t have a lot of experience or don’t have anyone to teach me tricks besides listening to Bigger pockets podcast but I’m willing to take that risk. I have a good paying job also that can help with the process. I just want to one day create passive income and be able to spend more time with my new daughter. Does anyone have advice for me?
Agree with checking with your 401k administrator. I do know that withdrawals can happen if buying your first home and living in it, potential for a house hack, but you would need to check. Also, you are only 30 years old and have 35 years to save for retirement, I am def on the more risky side than my wife who is very risk adverse. Having that much time to save I would invest in real estate but not all of it. Only borrow some of it. You pay yourself back through payroll deductions and you pay yourself interest when repaying the 401k loan. Don't take it all as you need to get the first one under your belt and use it as a learning experience, just when you thought you thought of everything, something pops up. The first one is always the toughest, but you can learn so much that will prepare you for the second, third, fourth......ones. You def want a reserve, so your actual savings account needs to be solid as well for those potential hiccups.
Plus you mention a new daughter, my family is #1, no matter what happens in my life, so as long as you are jeopardizing anything related to family and you are educating yourself, I would say grab the loan and make sure real estate is the right venture for you! Good luck, not an easy decision, but your in the right place and frame of mind!
