Cash out 401k/Traditional IRA for RE

2 Replies

I've been listening and reading about Tom Wheelwright's suggestion on cashing out on 401k/IRA and taking the penalties and investing it in real estate since new tax laws would be in favor of investors.

With new tax laws (2017) and the many deductions (bonus depreciation and doing a Cost Segregation), would passive investors benefit by cashing out their previous employer's 401k or traditional IRA to invest in real estate? I was debating if investing as an LP will have its advantages with the all the current tax changes.

Originally posted by @Mark Mata :

I've been listening and reading about Tom Wheelwright's suggestion on cashing out on 401k/IRA and taking the penalties and investing it in real estate since new tax laws would be in favor of investors.

With new tax laws (2017) and the many deductions (bonus depreciation and doing a Cost Segregation), would passive investors benefit by cashing out their previous employer's 401k or traditional IRA to invest in real estate? I was debating if investing as an LP will have its advantages with the all the current tax changes.

 @Dmitriy Fomichenko covers those kinds of questions. He may have an opinion. And @Michael Plaks can help you with the tax implications. I suggest you buy some of their time before you do anything.

Suggest you iron out this with your CPA quantifying the amount, tax and projected income at your future tax rate.

Your CPA wants to know what, how much you are invest in cash flow, affordability etc.