Using a 401k loan to buy sfh rental property outright,then doing a refi to pay off 401k laon. Anybody have experience with this strategy?
I want to buy a sfh rental using my 401k. Essentially I want to be my own private lender by loaning myself funds out of my 401k to buy the property free and clear and then do a refi 6 or so months down the road in order to pay back the 401k loan in full. If you have done something like this or have any experience with this sort of strategy please chime in. Also if you can think of any pitfalls by doing this feel free to share that as well. I know about the dangers of 401k loans such as losing your job and having the loan due in full within a short time frame after losing your job. Also I'm aware of the other drawbacks of 401k loans so I'm more interested in any potential pit falls of this strategy on the real estate side. One thing I'm especailly concerned with is doing this deal and then not being able to get a refi and being stuck with the 401k loan for 5 yrs. So anyway, please if you have any experience with this method chime in and let me know your take. Thanks