Investor · Johns Island, SC · Member since 2014 · 120 posts · 41 votes
I just got a contract on a duplex that I need to execute by Jan 31st. I’d like to fund it with my 401k and was planning to use Equity Trust. I’m now reading reviews and am second guessing Equity Trust. Should I find another custodian? Scrap my approach and go after a hard $ lender?
You can't purchase property using self-directed 401k that you personally in contract to buy. You are considered "disqualified person" to your 401k and assigning this contract to your 401k would be considered "prohibited transaction":
Investor · Johns Island, SC · Member since 2014 · 120 posts · 41 votes
6y
Interesting. The contract is in my name "or assignee". Plan was to close it in a LLC name that my 401k would be invested in. At least that is how I understood it. The self directed IRA, Equity Trust, would handle the logistics.
Solo 401k Expert · Anaheim Hills, CA · Member since 2012 · 18k+ posts · 6k+ votes
6y
John, like I said you are disqualified person to your 401k and assigning a contract to your 401k is a "transaction" which is prohibited. There is right way to do it, in the order I described above, don't try to put cart before the horse.