Using 401k funds for real estate - Anyone help ? - Posted by Jaydee

Posted by Bud Branstetter on June 25, 2000 at 14:29:50:

Unless it is your own corporation it is unlikely that your plan allows direct investing in real estate. You may be able to borrow up to 50% of the funds and pay yourself back over 5 years. But if you have experience at managing then you could quit and roll the 401k funds to a self directed IRA. The trouble then is that you have no job and need owner financing to buy. Penalties for withdrawal are 10% plus the tax hit in the year done.

Using 401k funds for real estate - Anyone help ? - Posted by Jaydee

Posted by Jaydee on June 25, 2000 at 12:19:53:

Can anyone inform me if it is possible to somehow use one’s 401k funds to buy property ? The total funds that I have is sufficient to put down the required 20 % on an apartment building and after all expences it will essentially mean I could " retire " from my employment right away . My credit is excellent but wanted to know if it is possible to use these funds and if so , the regulations and penalties if any ? Thanks in advance .

Re: Using 401k funds for real estate - Anyone help ? - Posted by glen ny

Posted by glen ny on June 25, 2000 at 20:20:19:

It is possible to use IRA funds to invest in real estate, see Entrust and Mid-Ohio banners above, but 401(K) funds operate under different rules. However, if your company allows you to rollover 401(k) funds (usually when you quit or retire), then they can be put in an IRA which can be used to purchase real estate. Note that it is part of the IRA and income goes back into the IRA, not in your pocket directly.

Enjoy!