There are several posts I've seen asking about whether or not it's a good idea to pull retirement funds out for REI. I've seen arguments for both sides and I'm looking to do this in the most tax efficient way.
I have several BRRRR properties and am continuing with that strategy. The returns I can get on those are much better than my retirement fund and I'll be able to be tax efficient with those investments. My properties are purchased through my LLC which this year in particular will have a lot of business write offs due to an influx of expenses this year and I am the sole owner so the LLC acts as a pass through tax wise.
Has anyone here done this before? How did you go about doing it and were you able to leverage any business tax situations to help reduce the early withdrawal taxes/penalties?
Generally the best way to do it is not to do an early withdrawal. Borrow against the retirement account if possible.
The early withdrawal penalty and taxes will mean that you're taking a large haircut to start and will be behind initially... Not optimal.
It doesn’t appear you need the cash to live on. If that is true, I would buy and hold the properties in a self directed Ira or 401k and start accumulating tax free income for life -to be most efficient. You work half as much and double the income you make. It’s all about how much you keep. When you have enough and don’t want to work anymore and your under 60 years old call me and I will show you how to take it out without penalties. Good job taking control of your financial future.