what would the best way to invest money from previous employer 401k so that I could use it in REI
Since the 401(k) is with a previous employer, you can roll it over into a self-directed IRA or Roth IRA. Then you can use the funds to invest in real estate, or almost any type of investment.
If you are self-employed, you can also consider the self-directed Solo 401(k) plan option. This gives you higher contribution limits, loan option, and the ability to use non-recourse financing tax-free. There are many topics on BP about both the self-directed IRA and Solo 401(k), you can do a quick search and see what others recommend.
Vanessa is correct. Since you have terminated service with the prior 401k sponsor, you can now choose to control those funds by transferring them into an IRA or 401k of your choosing.
I generally recommend you at the very least move the funds into a mainstream IRA and out of the 401k, as this will put the funds wholly under your control and not subject to any administrative issues that may arise in the event your prior employer goes out of business or merges with another company.
A self directed IRA or Solo 401k is a fantastic way to diversify your tax-sheltered retirement savings into real estate, notes or a whole array of asset classes beyond what are offered by the big name brokerages.
There is a lot of great content here on BP to get you started. At some point, you will want to pick up the phone and chat with one or more of the advisory firms that offer such plans to learn the in's and out's of how to successfully deploy your retirement capital into real estate. Discussing the matter with your CPA or other counsel is also a wise move.
If you plan to passively invest your retirement funds in real estate, meaning you will not run it like a business where you would perform the work on the properties and also want to get compensated, then a self-directed IRA or self-directed solo 401k may be a good vehicle to transfer your former employer 401k into.
On the other hand, if you want to flip properties and actively do work on the properties, then it will be deemed a business and thus the rollover business startup 401k (ROBS 401k) may be a good vehicle for you transfer your former employer 401k into.