In the next 5-10 years, I plan to leave my current industry and transition to real estate full-time, so I’m especially interested in how this could impact that goal.Current FinancialsRoth 401(k) Balance: $105KContributions: $79KEarnings: $23.5KSalary: $109KContributing 6% annually ($545/month), with a 100% match for the first 3%Investment Growth Assumption: 8% per yearCurrent Rental Cash Flow (Pure Profit After All Expenses): $7,500/month (9 units)Potential New Property Cash Flow (Pure Profit After All Expenses): $1,300/monthCurrent Real Estate Portfolio Value: $1.4MAfter New Property: $1.7MWithdrawal Breakdown ($60K)Tax-Free Contributions: $45KTaxed Earnings: $13.4KWhy Only $13.4K Is Taxed and PenalizedMy Roth 401(k) balance is made up of:Total Balance: $105KContributions: $79K (75.24% of total)Earnings: $23.5K (22.38% of total)When withdrawing, the money comes out proportionally from contributions and earnings.

I plan to live in unit 1002. 

I know you mentioned taking time to relax, do you plan to further scale or do something different outside real estate?

I'm planning on putting 25% down because that is a requirement of the loan.

But I usually heard this from people who had never owned a business before, didn’t have the cash to back up their plans, and often were planning to maintain full time jobs.My advice: Start with one business.

With things like the ONE Linden plan in Linden, which is a 50M plan to improve the neighborhood.

If you plan to sell it in the near future, I would focus more on the added value overall. 

However, the tax treatment differs between short-term and long-term rentals:Short-Term Rentals (STRs): If you materially participate (work 100+ hours and more than anyone else on the property), you may be able to offset rental deductions against W-2 or other active income, offering greater tax benefits.Long-Term Rentals (LTRs): If your AGI exceeds $100K, your rental losses may be limited, unless you qualify as a Real Estate Professional (REPS).If you plan to expand your rental portfolio, consider an LLC later for liability protection and easier management.

With proactive planning, they should be able to close on replacement properties within the 180-day period.

Sounds like a great plan if you can get an SFR that hits the 1% rule.