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Updated over 9 years ago on . Most recent reply

Using my 403K to invest
Hello, I would like some advice. I have a friend who wants to sell me his current rental. I do not have the 20% down payment the mortgage company is requiring. This amounts to $21,600. I am thinking of of using the entirety of my 403K (it is the teacher's equivalent to a 401K, sort of) and about 3,000 of my 10,000 emergency fund savings to pay for it. I did a rough estimate and I believe the cash flow will be somewhere in the ball park of $115, using the 50% rule. The home is valued at 108,000. Is it generally considered a bad idea to use retirement funds in order to bank roll your first investment? Thanks in advance.
Most Popular Reply

Instead of pulling money out of your 401k, why not take a loan out against the value of your 401k? That means you don't have any penalties, and once you pay back the loan, your 401k remains intact. I'd recommend talking to a good lender about how to do this (as they should be familiar with the concept) and if it makes sense for you.