I am unsure if I should pouring my money into the stock market to take advantage of compound interest at my young age, or save this money for a down payment on a rental property.

Since I no longer have a day job, I just see it as a replacement as I wanted to be self-employed and I take advantage of being able to take my own deductions. 

Why would I continue to save in my 401K and why would I not take advantage of this "10% discount" now and pull $100,000 out of my Retirement and invest in good quality rental properties. 

The idea is to repeat the process.If you bought one property a year for 10 years your cash flow is $36,000 a year plus all the advantages of depreciation, property tax deduction, mortgage pay down and interest deduction.  

This can be very tax advantageous for the seller because to the extent you can engineer this, she could possibly pay zero tax on this if she can keep her total income for each year under her deduction amount. 

But there are still some great advantages to owning your primary, such as: Your mortgage interest is tax deductible, and there is $500k capital gains tax exemption for married couples. 

With interest rates so low right now I would really love to take advantage and just replace the house.

Hi @Jacqueline Bustos I would take advantage of the fha loan if you can and leave yourself some cushion in your account for reserves. 

The other advantage that you have in Southern CA is appreciation.

Also, everyone is mentioning pricing going up and down, but another big lever is interest rates with are highly advantageous right now.