Down Payment from 401k

[Coreyell Lincoln]

Hey BP, I'm completely new to Real Estate Investing and I want to get in the game NOW. I have an LLC established, opening my business account soon here, and want to know about my first down payment. I don't have an IRA, I am currently employed, and want to withdraw from my 401k and use that capital as my down payment on my first rental property. As far as my 401k withdrawal, what is the smartest smartest way to get my capital, And what would be my penalty, if any, when doing so? I am ready to hit the ground running ASAP! Thank you for your feedback!

[Ashish Acharya]

Originally posted by @Coreyell Lincoln:

Hey BP, I'm completely new to Real Estate Investing and I want to get in the game NOW. I have an LLC established, opening my business account soon here, and want to know about my first down payment. I don't have an IRA, I am currently employed, and want to withdraw from my 401k and use that capital as my down payment on my first rental property. As far as my 401k withdrawal, what is the smartest smartest way to get my capital, And what would be my penalty, if any, when doing so? I am ready to hit the ground running ASAP! Thank you for your feedback!

Please dont withdraw the 401k. Just take out a loan from 401k (1/2 of the vested balance up to 50k- I think). Rates are very cheap and you are paying yourself interest. 

Make sure your DTI is not over the threshold with the loan.