ROBS 401K Rollover - Buy and Hold

[Cris Lowe]

Hello,

Long time lurker, first time poster.

I’m running into a bit of a problem and I’m in search of some guidance and a CPA.

I did a ROBS 401k rollover to a c corp for real estate investing in the spring. My first road block is getting financing with decent rates. My second is that the c corp may not be the best vehicle for buy and hold investing.

My goals:

Short term: 2-4 rental properties in 18 months. SFH or duplex/triplex/quad. Use cash flow to pay personal bills (wife is pregnant and I want a safety net).

Mid term: 4-10 residential properties over the next 3-5 years as capital allows. Use cash flow for expansion.

Long term: Commercial properties once capital is build.

Question:

Based on my goals above, do I continue down the c corp path? Or do I cash out the 401k, take the penalty, and have freedom for financing?

Regardless of direction, I’d like to build a relationship with a CPA to help with taxes and business set up in 2023.

[Dmitriy Fomichenko]

Cris, you can't pay yourself from a self-directed IRA from the cash-flow but you could take a distribution from the IRA. I'm afraid this wrong vehicle will not get you to your goals either since you are not planning on running active business with it.