20 Replies


Within the last few weeks, I've found the drive to put my desire to create passive income in front of my fear of moving forward to become a real estate investor. I've gotten LOADS of great advice and suggestions from members here, as well as podcasts and real estate investment meetings I've attended. 

Earlier this month, I received a call from the benefits center of a former employer which houses a deferred vested pension I have. I was advised I'd be given an opportunity to withdraw a lump sum distribution from my pension, with which I immediately began to draw up various scenarios as to how I could use this money as a down payment to purchase my first rental property. I've also started working with a few realtors to look at a few properties, and even started looking into different business entities to hold my investment(s).

Well low and behold, I was just notified there was a mistake, and I not eligible to make this distribution. Aside from being obviously upset about the time I've wasted looking into properties, I'm much more aggravated and feeling discouraged because I have no other financial means of obtaining financing in order to move forward with the process. 

I'm not even sure what my next step should be. I've tried to obtain funding through hard money, but have been unsuccessful, and I'm next to certain that I wouldn't qualify for traditional funding. At this point, I'm not sure if this is just a road block which is supposed to divert me into another direction, or if this is a sign that I don't need to move forward at all. I'm confused.

Hi @Brandon Hopkins

I 'm absolutely open to that scenario, it's just that almost all the of duplexes available here are in a neighborhood where I wouldn't feel safe. I know you have to crawl before you walk, but I have a disabled child and I need to be mindful of the environment I place her in. I'll have my realtor check and see what's out there.


I wonder if you have checked with your former employer about whether there is a" disability" clause in the " plan document" which might allow for a early withdrawal from the plan since you have a disabled child.

Hello Jennifer: relax, sit back, and start looking at alternatives. Just because one door is closed only means you have to open a different one:) There is more than one way to invest. Owner financed houses. Lease with option to purchase (this gives you time to arrange financing). Private money from a family member. Win the lottery---NOT! Read Gallinelli's book on financial metrics...and he points that out:) Anyways, don't give up! You don't have to buy one today.....so set yourself up to accomplish this goal with a slightly different time horizon. You CAN make it happen if you don't give up....so keep your hopes high and keep working until you reach your goal. Best of luck!

Hi @John Thedford

Trust me when I tell you, I'm sooooo not the type of person to give up. I've lived my life based on the adage that when a door doesn't open, you might just have to bring your own door. I'm the type to have a plan A, B, C,and D already in place just because life happens and we can never guarantee an outcome. My mom and dad always joke about how I always get things together whenever something doesn't go as planned. But for the first time in my life, I don't know what to do to bring my own door. At this point, it's not even just about creating a passive income so I can quit my job, it's more about just getting it done because the odds are so unfavorable and I want to prove to myself that I can do it. I feel like I'm at the point where I want to give up, BUT I'm smart enough to know that when you get to that point, that usually means there's a breakthrough waiting around the corner. I'm just not sure which corner I need to be hanging out on to get the breakthrough!!! LOL!!! (whoooooooo-sahhhhhhhh)


Owner financing on a land contract can be a good option for someone looking to put minimal down. There are owners out there that will sell in this fashion but most likely you won't find them on the MLS. I would recommend joining your local real estate organization. People in these organizations are typically semi-sophisticated so selling on a land contract probably won't scare them and they may even look at it as a benefit. Most of these people have also been helped by someone over the years and like to help investors in the same way someone helped them. Best of luck.

@Jennifer S. If the pension is from a former employer, you should be able to roll it over to a self-directed IRA (Roth) which would allow you to utilize the funds for real estate investment and not be subject to any early distribution taxation.

Make sure you do a roll over and have the funds sent directly from the current pension plan to the new SDIRA custodian and do not have the check sent to you, this will ensure there is no confusion on whether it was a roll over versus a taxable distribution.

We all have moments of discouragement but you have to keep looking for new ways to do what you want to do and that looks different for everyone.  On paper I should have my first deal by now, but I am still working toward it.

Stay positive and keep taking steps toward your goals and before you know it you will look back at this time when you thought it was never going to happen and think...wow look at my 5, 10, 100+ property portfolio.  

The fact that you are young and even thinking of ways to secure your future, make me believe it is just a matter of time for you.

Good luck

@Jennifer S. if you are shaking a tree and no fruit is falling out of it, there is a possibility you are shaking the wrong tree. It has already been said, but I will say it again, start looking for new ways to find deals. I would say that less than half of the deals I have ever done were listed on the MLS. I will go on to say that not all Realtors are equal. There are some rock stars and there are some that shouldn't quit their day job.

I started with bad credit, no money, and an unbreakable drive to succeed.  So far, so good.  Start reading about creative financing.  You will likely NOT find the perfect recipe.  You will, however, find several key ingredients that you can combine to get a deal done...WHEN you find the right deal.

I will share some advice I was given early on..."if you find the right deal, the one that makes a ton of sense to close, the money will find you, you won't have to find the money".  Start learning how to find REALLY good deals.  You will dig through a lot of information, you will look at a lot of bad deals, you will feel you are wasting time.  You will also be learning how to find the low hanging fruit, the deals that are full of "juice".  I have gone years in between deals because I haven't found the right fit.  I have also had deals come to me when I wasn't looking to buy, simply because people knew what I did and how to get in touch with me.  I might do several deals at a time, then nothing for quite a while.

The bottom line is if it was easy, every body would be doing it.  When I started out, I put a simple ad in a local paper that ran every week.  Something like "I buy real estate.  Call ..."  My phone wouldn't ring a lot.  However, I closed a couple deals that brought enough equity that I could run that ad for a couple hundred years and still be money ahead.  It was simply, cheap, and easy to do.  It got me in front of people to try to close deals.  Many went nowhere, but the experience I gained was invaluable.

Don't quit because you get knocked down or fall down.  Get up, brush off the dust, and keep going.

Good luck, happy investing!

Just one set back and there will for sure be many more, so stick with this one till you get overcome it. Remember where there is a will there is a way :) Consider connecting with seasoned investors I am sure there;s something /services/skills  you can bring to the table in exchange - atleast to get you started.  Hang in there!

@Cheryl P.

Hi Cheryl,

It's funny you mentioned the self directed IRA because that's EXACTLY what I was trying to do with the pension. The brick wall I'm running into is that when I left my former employer, the pension was administered by Hewitt AON, which advised me I would not be eligible to withdraw the funds until normal retirement age of 65, or 59.5 at a reduced benefit level for early retirement because I did not have enough time in title.

The problem with that is I'm only recently finding out that there was a special cash out window when I left the company, which would've made me indeed eligible for a lump sum distribution, whereas I would've been able to commence a full unreduced rollover.

The administrator is now Xerox, who claims they have no record of receiving an application for benefits from me based on the information provided by Hewitt once they relinquished administrator, nor do they have a way to verify what was or wasn't handled properly by Hewitt. At this point I've opened a claim and am gathering documentation to support an appeal if need be. 

Although this situation is the brunt of my frustration, I'm still maintaining a positive attitude, and I'm more than certain that I'll figure out an option which will allow me to move forward with accomplishing my goals. It is people like you who inspire me to keep going, so thank you, thank you, thank you for your encouragement and advice!! :)

I'll keep you posted 


@Adam Johnson

I couldn't agree with you more. 

I do a 30-day meditation every few months, and a few days ago the mantra was 'Prani Dhana', which guides awareness in the natural process of letting go of constricted, conditioned thinking. The take away for the day was to remember that obstacles are not your enemy, but rather an red flag that our actions need to be focused towards another direction. 

There's something I'm missing - some stone I have yet to look under to find what I need to move forward. I'm anticipating my Ah-Ha moment like a kid waiting for Christmas morning. I'll keep you posted when I figure it out and I appreciate your words of encouragement... :)

- Jenn

@Katherine T.

Hi Katherine,

I'm surely going to hang in there. I think I'll feel a bit more comfortable with future setbacks once I've gotten a chance to complete my first deal, because at least I'll have more of an idea on how to overcome the road blocks. But I'm definitely not going to let this get me down or change my mind about becoming successful at this. They say anything worth having is worth fighting for, and I've got my gloves on, ready to go!

Thank you for your encouragement Katherine!! :)

- Jenn

It's funny you mentioned the self directed IRA because that's EXACTLY what I was trying to do with the pension. The brick wall I'm running into is that when I left my former employer, the pension was administered by Hewitt AON, which advised me I would not be eligible to withdraw the funds until normal retirement age of 65, or 59.5 at a reduced benefit level for early retirement because I did not have enough time in title.

What you want to do is to inquire with the plan administrator about a Rollover, not a withdrawal. If this plan is with the former employer you should be able to roll it over into an IRA (self-directed).


I assume you are no longer working for the company? If so, Ask your plan administrator what papers they require to make a "direct rollover" to an IRA. Open your self directed IRA account be able to tell the plan administrator to make the check payable directly to your IRA. Ask your first plan administrator and if they do not have the information then go to the second one. Good luck

Hello @Carl Fischer

You're right. I left the company in 2003 and the pension has been sitting as a 'DEFERRED VESTED PENSION'.

The reason I'm being told I am ineligible to commence ANY sort of distribution or roll-over is because I did not initiate the process immediately when I left the company. The thing is, that's not true. When I inquired about initiating the lump sum back then, I was told I was ineligible because I did not have enough time in title to commence an early retirement. However, there was a special cash-out rule at that time which would have made me eligible for a lump sum distribution. 

Every time I heard in the news that the company was offering a buyout, I called to inquire if I would be eligible and given the same answer...for the last 12 years. Last month, I called in again and was told that I was eligible for a lump sum and that it needed to be manually calculated. Once the calculation began, I got a call about 3 days later and was advised they made a mistake, and that I was not eligible.

I'm currently going through the claims process and have submitted paperwork to support my claim in the hopes that they see where the mistake was made and open up an option to roll-over into a self directed IRA.