Real Estate Investor · Wheaton, IL · Member since 2016 · 6 posts · 0 votes
Hi there - newbie here. I have a 403B from a company where I used to work. I took out a loan to pay for monthly living expenses and I still owe about $8,500. I would like to roll this 403B into a self-directed IRA, but I can't do that until I pay off this loan. Right now I have almost no income and am living off another IRA while I get my real estate investing business started.
I am trying to figure out how to payoff that $8,500 so I can roll it into the self-directed IRA. I am considering taking the money out of my IRA to pay off that 403B loan so I could roll it into the self-directed IRA and use it for real estate investing.
What do you think? Do you have other ideas how to get that loan paid off? Thanks!
If you will be legitimately self-employed, you would have the option of establishing a Solo 401k plan. Those plans offer a loan provision, which is something and IRA does not.
You may be able to rollover the loan from the current plan to a new plan, depending on the current administrator. If not, you could borrow money personally for a short term, pay off that loan, setup the new plan, and then take a new loan.
Real Estate Investor · Wheaton, IL · Member since 2016 · 6 posts · 0 votes
10y
Thx Brian - I'll look into that. Not sure I could get a short term loan. I'm stretched pretty far as lending goes. But something to check out. Good ideas!
It is important to note that when you invest a self-directed IRA into real estate the IRA owner has to return all the gains back to the IRA and then take the distribution from the IRA if necessary.
Solo 401k Expert · Anaheim Hills, CA · Member since 2012 · 18k+ posts · 6k+ votes
10y
Leslie, you need to get a job or some other source of income while you getting started. It will take a while for you to create some income as a result of REI, but in the mean time you need to pay for your living expenses (and using your IRA for that is not very prudent). Also, if you don't have any savings and will be investing in an IRA - you can't use cash flow or other income/gains personally as Mark mentioned above.
This may not be the answer you want to hear but I'm just trying to be realistic here (unless you have something else going on which you didn't mentioned in your post).
Real Estate Investor · Wheaton, IL · Member since 2016 · 6 posts · 0 votes
10y
Thx everyone. I am not planning to use the IRA to live off of - just wanted to be able to invest it in real estate. I had taken a 401K loan previously to use for living expenses and I am paying that off.