All Forum Posts by: Lane Kawaoka

All, I know the tax implications and aware of other options such as loan but what I wanted to know if anyone has taken the bold move to actually do this and how did you come to the decision.

Has anyone withdrew upon their company sponsored 401k, while paying the 10% penalty? What was your thought process?

Has anyone cashed out their company sponsored 401k while taking a 10% early withdrawal penalty? What was your thought process on making that bold move?

IMHO - 

1) Down markets come every 8-12 years. 2000-2008-xxxx? The story I got out of this past recession was that it was a very slow (unusual) recovery and therefore the 8-12 year cycle should be more on the longer side.

2) Seems like we are agree that when interest rates start to creep up that it will lead to a downturn in markets. I'm sure the government knows this and they are going to put some mitigation in place so this does not happen to a great extent. They have said they were going to raise raise since 2012 but we are still in the holding pattern.

3) BP has grown to 300k users... is this a good thing or a bad thing. We can't be all RE investors.

4) I want to point out that there is a paradime difference in people who are investing in their own homes (& living in the cyclical East/West coasts) and those investing for cashflow with rentals. If you are investing in Cash Flowing Rental (w/ 50% rule) who cares if we are near a bubble.

All with portfolio loans... what kind of terms (rate/years) are you getting? I'm going crazy about explaining every tedious little transaction in my accounts when getting a conventional loan, is it worth it?

@Nicole Jones Beware of talk like "10 will likely be the "I made it" amount". Don't just think of tomorrow appreciate today. The bar will inevitably move to 15-20-50...and you will never be happy.

It would be safe to refi as long as you are still cashflowing a couple hundred a month (assuming 50% expenses).  We have had a good run up in this market so far... might it be time to sell and take your profits and run.

@Scott DixonOn the 401k loan I think most companies will not allow this because they it want it to be on a primary residence not a non-owner occupied transaction?  Was this the case.  Did you just seller finance the whole thing?  I'm all for leverage but if you lose your job then the cards can come tumbling down.  Also the 5 year amortization is a short period what is your plan there?

@Joshua Swanger mentions getting a non-recourse loan with with a rolled over 401k/IRA. This an option but the terms are not that great and therefore a secondary option to a conventional loan - not to mention the PITA required in deciding which part of the loan needs to be paying UBIT taxes. Thus is why I am thinking paying the 10% penalty an being able to use the money in a conventional loan is better.

@Account Closed I think you can only convert your 401k into a solo if you are not at that original company that sponsored the original 401k?

http://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics---Tax-on-Early-Distributions

Has anyone cashed out their 401k?  You would have to pay a 10% penalty plus you pay federal/state taxes.  Any comments is it too risky or risky not to do it?

@Jason L. Let me just catch you there you used a bad 4 letter word "REIT". No friend of mine should every use these because the operator just skims all the profits for themself.

@Matt R.#Coffee #ProcrastinateDoingTaxes