Solo 401k success stories

17 Replies

Hello BP, im currently in the process of rolling over some funds into a solo 401k. I just wanted to hear how some of you guys and gals have been able to maximize your solo k thru realestate investing.. Thanks!

I use my 401k to buy real estate, notes, and private placements.  Mine is an ERISA 401k not a solo.  Works the same way though.

@Ramon Moreno
I have been investing in non performing and performing notes for over a year. The reason I prefer them to private lending is:
1. I am in the first position
2. I have more exit strategies
3. If lending - You run the risk of lack of experience by the borrower and recourse is a home that is typically half finished and will cost considerably more to repair. With notes there is risk they continue to not pay and you have to foreclose which can be a pain but not as painful as having to take over a fix and flip from a borrower

I'm using my Solo K to JV on residential flips and purchase both distressed and reperforming mortgage notes. The great thing about using a 401K vs my traditional Roth SDIRA is the ability to leverage the flips without UDFI.

I also bought a bit of American Eagle gold coins and purchased some Bitcoin and Ethereum cryptocurrency. The latter investments are of course not real estate, but purchased as a hedge when the US dollar continues its value decline. 


I also bought a bit of American Eagle gold coins and purchased some Bitcoin and Ethereum cryptocurrency.

Hi Bob, how were you able to purchase cryptocurrency using 401k funds? Most exchanges I’ve seen don’t allow opening a wallet under the trust name.

I was able to just set up an account with Coinbase, they asked for my name address and bank ACH transfer info. They did not ask if a company account, trust, etc. 

@Bob Malecki

Many of our clients link their solo 401k bank account to coinbase. Conibase basically pulls the funds from the solo 401k bank account directly. Many have done it through Wells Fargo Bank and Bank of America.

I have a w2 job with an employer-sponsored 401k, if I were to earn side income from commissions as a real estate agent (1099 independent contractor) could I invest in a Solo 401k?

Originally posted by @George Blower :

@Bob Malecki

Many of our clients link their solo 401k bank account to coinbase. Conibase basically pulls the funds from the solo 401k bank account directly. Many have done it through Wells Fargo Bank and Bank of America.

 I use my local neighborhood bank and as long as one can provide the routing and  account number for ACH there should be no problem.  I got in "late" with Bitcoin at $3,800. I also opened a Pension Trust account with Schwab linked to my Solo K and have been investing in penny stocks with Canadian companies who are involved with the Canadian cannabis industry which is poised to be commercially legal in 2018. 

@Bob Malecki

If you did not open an institutional account using the 401k plan name and 401k EIN, you have a personal account with Coinbase.  Using plan funds in a personally held account could be a real problem.  I suggest you review your situation with your plan provider.

I

@Jordan Decuir

Yes, your self employment as a real estate agent would allow you to establish a SoloK. You have one cap of $18K for personal contributions that applies to all plans you participate in. The SoloK could accept profit sharing contributions from your real estate commissions independent of your W-2 401k participation. You cannot rollover funds from your current employer 401k, but any outside tax-deferred IRA or former employer 401k funds could be rolled into your SoloK.

Originally posted by @Brian Eastman :

@Bob Malecki

If you did not open an institutional account using the 401k plan name and 401k EIN, you have a personal account with Coinbase.  Using plan funds in a personally held account could be a real problem.  I suggest you review your situation with your plan provider.

I

 I agree but Coinbase does not request nor require a tax ID. Interesting eh?

@Jordan Decuir

You personally could contribute up to $18K total to either plan or split across plans.  So if you are not contributing $18K at work, you could potentially have some room in your own plan.  If you are a sole proprietor, your real estate business could do a profit share of up to 20% of your net business income - which is gross income, less expenses,. less 50% of self-employment taxes.  All of this is contingent on the level of your self-employment income.  Speak with your CPA for accurate estimates specific to your situation.

@Bob Malecki

Coinbase asks for an EIN with an institutional account, which is what your 401k trust should have.  If they did not ask for an EIN or trust docs for your plan, you are in the wrong style of account.