Avoiding penalties Cashing out My 401K

[Jasen Pyles]

When I quit my job I'm going to cash out my 401k. Is there anyway that I can avoid the penalties if I am going to invest it into an investment property? what percentage is the norm when cashing in your 401k?

[Dmitriy Fomichenko]

Jasen, you can setup self-directed IRA or 401k, which can in turn purchase investment property. The buyer and the owner of the property will be your IRA, not you personally.

You can use leverage, but you are not allowed to use conventional financing because you are considered disqualified person. The loan must be non-recourse. 

You can sell property any time you wish, the funds from the sale would go back to your IRA. If you decide to take distribution from your IRA early - you will be penalized.