The debt you put on a property will determine how it performs to an extent cash flow wise.Bottom line with banks is they see interest rates rising eventually.

Most individuals eventually want to get current income from their investments and seem to move away from their IRA or put long term holds into their IRA.  

Our goal was to make it one and thus add value by converting it into a legal duplex.  

I'm looking to get into renting out condos eventually.

I think by doing this it'll help get more eyes out there looking and something should eventually come my way. 

One of the local investors here only looks at MLS properties, writes up tons of offers, and then eventually gets one under contract.

Not sure if this makes a difference but this is a stable area, even in 2008 prices only dropped by about 20% from what I hear.Also I was looking into living in the house I rent out as wellfor now but eventually will move out and that will be just a rental.What do you think, do you always have to abide by the 1% rule?

Although I do not want to limit myself to only flipping, eventually I want to start a real estate company.

Then as you pointed out, in a year or two you can convert the 4-plex into strictly a rental property and move on to the next deal.Rehabbing property is a lot of work.  

If you are in the 30% tax bracket, that is approximately a negative 25% ROI for the plan principal that you borrowed.And, you will be taxed again when you eventually withdrawal this capital from the 401k in retirement.So, the benefits of borrowing from the plan in order to fund an outside deal need to be well worth it.In my opinion, too many folks look at this as "easy money" and promote the 401k loan as a great way to get started in real estate.