Attorney needed for 401K property purchase

Minneapolis, Minnesota
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Attorney needed for 401K property purchase

Chad BoettcherPro Member
Member since 2025 · 5 posts · 0 votes

Does anyone have a recommendation for a real estate attorney in Minneapolis area who's familiar with a solo 401K purchase of a property?  I need to draw-up a contract for my 401K to purchase 2/3 of a property (I would be the other 1/3 owner).  

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Bryon AndrewsBusiness Member
Real Estate Agent · Saint Paul, MN · Member since 2018 · 201 posts · 104 votes
7mo

Hey @Chad Boettcher I just sent you a message about this.

[email protected]715-892-4596
Bryon Andrews Real Estate51 Review
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  • Brett SynickyPro Member
    Solo 401k and SDIRA Consultant · Orange, CA · Member since 2013 · 876 posts · 499 votes
    7mo

    @Chad Boettcher While this can work it's best to stay away from investing alongside your 401k. Everything will need to be split pro-rata, non-recourse financing is still a must, you still can't perform services or go stay at the property, tbh the accounting complications this creates is likely not worth it. You also don't want the IRS to accuse you of "enabling" your 401k, while it's not technically a prohibited transaction, it can cause an inquiry.

    If your 401k needs your 1/3 to make the deal work, just get a non-recourse loan or partner with a non-disqualified party. 

    To find an attorney, maybe visit super lawyers online and start calling them to see if they'll help. 

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  • Bryon AndrewsBusiness Member
    Real Estate Agent · Saint Paul, MN · Member since 2018 · 201 posts · 104 votes
    7mo

    Hey @Chad Boettcher I just sent you a message about this.

    [email protected]715-892-4596
    Bryon Andrews Real Estate51 Review
    View Page
    1Reply
  • Tim SwierczekPro Member
    Lender · White Bear Township, MN · Member since 2016 · 1k+ posts · 1k+ votes
    7mo

    @Chad Boettcher I have to agree with @Brett Synicky. I'm a lender and get this request often, and the further my clients dig, the less interested they become. I have never had someone complete one without switching to a partner setup, vs the 401K owner being the partner.

    1Reply
  • Chad BoettcherPro Member
    OP
    Member since 2025 · 5 posts · 0 votes
    7mo

    Thanks everyone!  Very helpful...and the advice is much appreciated.  To further describe (or maybe complicate?) the situation, my siblings and I have inherited this property from my Mom who just passed away.  So I'm already the 1/3 owner...and was looking for the 401K to purchase the 2/3 from my siblings.  Originally, I wanted the 401K to own the whole thing...but I know it can't purchase my third. 

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    • Tim SwierczekPro Member
      Lender · White Bear Township, MN · Member since 2016 · 1k+ posts · 1k+ votes
      7mo
      Quote from @Chad Boettcher:

      Thanks everyone!  Very helpful...and the advice is much appreciated.  To further describe (or maybe complicate?) the situation, my siblings and I have inherited this property from my Mom who just passed away.  So I'm already the 1/3 owner...and was looking for the 401K to purchase the 2/3 from my siblings.  Originally, I wanted the 401K to own the whole thing...but I know it can't purchase my third. 


       In that situation, your equity can become your down payment. You will have 33% down, which is more than enough for any loan program. You can still accomplish what you want, and you don't have to complicate it by involving the 401(k).  There are special rules regarding inheritances that allow you to cash out to pay off a co-owner, and you are not subject to the normal cash-out seasoning. This is an easy deal. Reach out by PM if you need specific pointers.

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