Structuring a partnership investment using a 401K loan

[Jeff Piscioniere]

My next property purchase will use a 401K loan from myself or my wife’s account. I want to structure it in such a way that we are paid back so that the loan balance can be reduced quickly. The point of this is to simple have the funds back to move onto the next deal. The target property almost definitely has to be a value add minimally distressed property that can be refinanced after repairs, or just a fix and flip.

Where I’m confused is to best word a partnership agreement to be reimbursed and how that would affect my cost basis in comparison with my partners?

In full disclosure, I have no intention of charging my partners interest since the 401K loan interest is being paid back to ourselves only (no need to justify loan interest reimbursement that I would be paying a bank had it been a different loan).

Thank you in advance.