401k to fund deals - Posted by Daniel Anzanello

Posted by Hugh Bromma on April 03, 2001 at 11:23:24:

Your 401(k) may provide for a self directed feature, permitting you to invest your earmarked account in any permissible investment. Check with your administrator or trustee to determine if that investment feature is part of your plan. If it is, you direct the trustee to make investments you direct with your 401(k) funds, and those investments become part of your account assets.

If your 401(k) does not have such a feature, it may have an in service withdrawal feature, which will permit you to withdraw funds from your 401(k) account, usually after 2 years, and roll those funds to a self directed IRA, which will then permit you to make the investments you choose. As mentioned in another response, if the plan ahas a loan provision, you could use that. You can withdraw 50% of your plan balance up to $50,000. If it is for bulding a primary residence, you have up to 30 years to repay, otherwise, 5 years, in equal periodic payments not less than quarterly. Ask your administrator for details.

401k to fund deals - Posted by Daniel Anzanello

Posted by Daniel Anzanello on February 20, 2001 at 24:30:30:

I have heard recently of people using their own 401k to fund real estate deals. Does anyone out there know how this works?


Re: 401k to fund deals - Posted by Bud Branstetter

Posted by Bud Branstetter on February 20, 2001 at 09:44:26:

Most 401K plans have an feature that allows you to borrow up to half the value of the account. You pay yourself back with interest. IF the proceeds go directly to the investment then that interest is deductable. The drawback is that the payback period is 60 months. This is usually over twice the monthly payment that a conventional 30 year loan would be because of the shorter term.

With so many job changes today if the 401K is rolled into a self directed IRA rather than to the new job, the funds can be used to invest.

Re: 401k to fund deals - Posted by TRandle

Posted by TRandle on February 20, 2001 at 08:52:04:

Click on the Entrust banner near the top portion of the newsgroup page or look up Mid Ohio Securities on the web. Also, I believe there’s some related articles on this site.