Federal Employees: Using a TSP loan to Acquire a Property

[Harrison Lopes]

This question sprung in my mind while analyzing two properties. One is an SFR which already has a tenant and requires very little in terms of renovation. I have enough for a down payment and closing so money-wise, I'm good there. Sign some paper and I'm looking (very conservatively, at $150/month cash flow). The other option is a vacant duplex that needs a little bit of work, perhaps $30,000 in renovation. I have enough for a down payment and closing, but I may be short (or too close for comfort) of the $30,000 needed to renovate and get tenants in. However, if I did pull this off we're looking at possibly $300/month cash flow and built-in equity as the duplex is priced very low; in fact, even lower than the SFR!

Therefore, I'm looking for creative ways to fund a renovation of the duplex.

Have any federal employee investors ever taken out a TSP loan for the purpose of building their portfolio? I know the default federal employee's answer is "heck no! compound interest!". But what if I rather take the money out and bet on myself? I believe the money would establish a better ROI in my RE portfolio rather than in a passively managed retirement account. Further, I rather have the money actively working for me rather than sitting in an account waiting for federal retirement (I'm 30 by the way, so not for a while).

Any thoughts either way would be interesting to hear.