Using QDRO to transfer my 401(k) to self-directed IRA

[Matt Towner]

Hi Everyone!

I’m new to BP and have been searching for commercial real estate for the past couple years to use as a “House Hack” of a different color. That deal has finally been found and we’ll be closing before the end of April. Of course, when it rains, it quite often pours and another great deal has come up but I’m now short on cash to make it happen.

I currently have a size able amount in my employers 401(k) plan that has recently gone from great options to sub-par. To make better use of these funds, I'm contemplating putting together a QDRO with my spouse and transferring the funds to her self-directed IRA. We could then use these funds to purchase the property and not miss out on the deal.

The only downside with this is that all of the income from the property will be stuck in a retirement fund that I can’t get to for close to 30 years (except to reinvest).

What are your thoughts on going this direction? Should I try to find investors instead and leverage my HELOC and a 401(k) loan instead? Cash flow would be low for a couple years until the 401(k) loan is paid off, but should bring in about $3k/mo once the down payment is no longer being repaid.

Thanks in advance for any advice and this place has been awesome at keeping me occupied while not being able to leave the house.