Moving my 401k to use for Real Estate Investing?

[Ernesto Barragan JR]

I have about 120k in my 401k and 100k in equity  at the moment and would like to use it towards real estate investments. I've been researching different services to move my 401k money , such as Whole life Insurance or a self directed ira. How would you go about moving 401k money over and into what and whats your opinions on the concept of using whole life insurance as infinte banking? 

Thank you!

[Dmitriy Fomichenko]

Quote from @Sarah Richardson:

Call Vantage IRA! vehicles to borrow against your IRA to buy real estate.

Sarah, you could set up a self-directed IRA, transfer your existing retirement account in it and then buy real estate inside of a newly created self-directed IRA. But it is NOT POSSIBLE to borrow agains your IRA to buy real estate. 

[Ernesto Barragan JR]

Quote from @Christophe Madell:

@Ernesto Barragan JR

Have you thought of private lenders?

Yes, I have thought of that. I have yet to do my first deal and not sure how comfortable I'd feel using a private lender on my first deal. What the typical interest rate you get with private lenders?

[Ernesto Barragan JR]

Quote from @Dmitriy Fomichenko:

@Ernesto Barragan JR

It is not possible to take a loan from an IRA.

If you wish to invest using self-directed IRA - you don't need to withdraw the funds, you buy real estate inside of the IRA. IRA owns the property, not you. 

Ok I understand now, how would the monthly cashflow of the property work? Would I keep the cash or does the cashflow of the property go right back in the self directed IRA?

[Ernesto Barragan JR]

Quote from @John Perrings:

Quote from @Ernesto Barragan JR:

 Whats your opinion on the concept of Infinite Banking through whole life insurance?

 I do IBC myself and help others set it up in their lives every day. So I guess you could say I’m a big fan 🙂

 Thats Awesome, would you advise I liquidate my 401k and pay taxes to set up a IBC policy? Have you helped anyone in similiar situations?

[Ernesto Barragan JR]

Quote from @Chris Davidson:

Quote from @Ernesto Barragan JR:

I have about 120k in my 401k and 100k in equity  at the moment and would like to use it towards real estate investments. I've been researching different services to move my 401k money , such as Whole life Insurance or a self directed ira. How would you go about moving 401k money over and into what and whats your opinions on the concept of using whole life insurance as infinte banking? 

Thank you!

If you are still working with the company you might be able to get a loan on against your 401k, and that would be the easiest option as you could do a BRRR and pay back the loan. If you aren't a self directed could be an option but with 120k you really are limited on acquiring properties, however could lend on rehabs. With Self directed getting loans is more difficult and you owe taxes on the leveraged portion, and is more complicated than I like. I just pulled out funds and payed the penalties early this year. While to some that was a bad move given how the market has performed this year vs my property I am ok with my decision.

For Infinite banking it sounds nice, but more complex and time consuming than just making money the ways I know. I like to keep things simple and easy; staying to what works for me.

 ok I understand, with 120k I was under the impression that it would be enough to start off with one property and then brrr and so on. I don't plan on buying property and completely pay it off. So in my standing what would be the best approach in your opinion to aquire my first investment property?

[Dmitriy Fomichenko]

Quote from @Ernesto Barragan JR:

Quote from @Dmitriy Fomichenko:

@Ernesto Barragan JR

It is not possible to take a loan from an IRA.

If you wish to invest using self-directed IRA - you don't need to withdraw the funds, you buy real estate inside of the IRA. IRA owns the property, not you. 

Ok I understand now, how would the monthly cashflow of the property work? Would I keep the cash or does the cashflow of the property go right back in the self directed IRA?

Since IRA owns the property, all income from the property belongs to the IRA.

[Dmitriy Fomichenko]

Quote from @Ernesto Barragan JR:

Quote from @John Perrings:

Quote from @Ernesto Barragan JR:

 Whats your opinion on the concept of Infinite Banking through whole life insurance?

 I do IBC myself and help others set it up in their lives every day. So I guess you could say I’m a big fan 🙂

 Thats Awesome, would you advise I liquidate my 401k and pay taxes to set up a IBC policy? Have you helped anyone in similiar situations?

 I think this would be a huge mistake! Talk to your CPA about how much this move is going to cost you in taxes and penalties.

[Chris Davidson]

Quote from @Ernesto Barragan JR:

 ok I understand, with 120k I was under the impression that it would be enough to start off with one property and then brrr and so on. I don't plan on buying property and completely pay it off. So in my standing what would be the best approach in your opinion to aquire my first investment property?

 Without knowing the IBS enough to give you detail on that I would either look at taking a loan on the 401k or just doing a cash out and pay the penalties. The Self directed is a great way to invest if you aren't worried about touching the money or being actively involved in the property in any way. 

However  I would not pull money out of the 401k until you are ready to buy and know which property you are going to buy. Talk to a lender and see what kind of timeline they will need with funds moving but you should be fine and 120k will be enough to get going leveraged.

Best of luck!

[Ernesto Barragan JR]

Quote from @Chris Davidson:

Quote from @Ernesto Barragan JR:

 ok I understand, with 120k I was under the impression that it would be enough to start off with one property and then brrr and so on. I don't plan on buying property and completely pay it off. So in my standing what would be the best approach in your opinion to aquire my first investment property?

 Without knowing the IBS enough to give you detail on that I would either look at taking a loan on the 401k or just doing a cash out and pay the penalties. The Self directed is a great way to invest if you aren't worried about touching the money or being actively involved in the property in any way. 

However  I would not pull money out of the 401k until you are ready to buy and know which property you are going to buy. Talk to a lender and see what kind of timeline they will need with funds moving but you should be fine and 120k will be enough to get going leveraged.

Best of luck!

 Gotcha! Thanks alot for the information anything helps,I appreciate you taking the time out.

[Ernesto Barragan JR]

Quote from @Dmitriy Fomichenko:

Quote from @Ernesto Barragan JR:

Quote from @John Perrings:

Quote from @Ernesto Barragan JR:

 Whats your opinion on the concept of Infinite Banking through whole life insurance?

 I do IBC myself and help others set it up in their lives every day. So I guess you could say I’m a big fan 🙂

 Thats Awesome, would you advise I liquidate my 401k and pay taxes to set up a IBC policy? Have you helped anyone in similiar situations?

 I think this would be a huge mistake! Talk to your CPA about how much this move is going to cost you in taxes and penalties.

 Ok I will look more into it thanks for the information!

[Adam Bartling]

I am not affiliated with https://www.questtrustcompany.... but I went to their expo the other week and they and others like them have some very in depth knowledge.  Quest has many reputable investment groups at their events.  Actually went to one tonight.  

Seems Like Dmitry Fomichenko knows what he is talking about 

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