Anyone pulling out 100k from their 401K penalty free?
Bradenton, FL · Member since 2017 · 168 posts · 39 votes
During Covid-19...everyone has been affected one way or another. Who out there is withdrawing 100k per person (married) and buying real-estate?
My wife and I already have a nice portfolio, this could get me out of Corporate America this year at 49 & purchase 4-5 more SFH.
Let's here your perspective please!!
@Marty Summers
I personally prefer a self directed IRA with checkbook control. I work in North Carolina, where American IRA is based out of, and also work in Texas where Quest Trust is based. I personally prefer to go with the local IRA/401K administrator just because you can get local service. For example, Quest Trust is constantly putting on educational workshops and venues to get their clients educated and networked. I also use their Meetup space in Houston on a regular basis at no cost. They are big on community and helping you succeed, so the value is definitely there. One thing that I have not liked about Quest is that they are not supportive of the self directed IRA/401K with checkbook control. With American IRA, they are very supportive of this feature. So there are pros and cons to most providers.
The reason I like checkbook control is that many times in real estate investing you need your money quickly. If your money is “Administered” it means that each time you do a deal, you have to send in the deal to that Administrator and they will check the prongs of your deal to make sure you are investing properly so as to not expose your IRA/401K. This is based on someone who may make a mistake and violate the law and expose their full retirement account.
Each time you do a deal you will need to fill out the paperwork and then send it in to your administrator. This takes time and costs money. They will all tell you that they will get back to you, in most cases within 24 hours, but the truth of the matter is that it normally takes days because you are tied up with the bureaucracy. I have seen deals lost because of the time it takes to jump through all of their hoops.
On the other hand, if you have checkbook control, you control every financial transaction - from writing a check to wiring funds. Very fast and easy. The question you need to ask yourself is - “How well do I know what I can or cannot do with the IRA/401K?”
In our case, in order to avoid complications, most of my clients just lend the funds to an investor/flipper. Because they fund only, this makes any 401k questions obsolete. Most of the buyers we have in our group pay 12% and 3.75 points to the lenders. This is a solid way to make money. Remember here, the key is to make sure you know what you are doing. If you do, then you are safe. Many of the people I work with have IRA’s/401K’s. They all know the rules pretty well. They all network with each other and normally choose to operate on the safe side of things.
In the end, I think most IRA/401K companies are created equal. Their fees are about the same. They all claim to do it better than the other guy. What I have seen is that they all administer at about the same pace with similar fee structures. The thing that makes the difference to me is the one that will set you up in the self-directed checkbook control situation, but you must be a savvy IRA/401K investor or have people around you that know what they are doing.
@Marty Summers
I personally prefer a self directed IRA with checkbook control. I work in North Carolina, where American IRA is based out of, and also work in Texas where Quest Trust is based. I personally prefer to go with the local IRA/401K administrator just because you can get local service. For example, Quest Trust is constantly putting on educational workshops and venues to get their clients educated and networked. I also use their Meetup space in Houston on a regular basis at no cost. They are big on community and helping you succeed, so the value is definitely there. One thing that I have not liked about Quest is that they are not supportive of the self directed IRA/401K with checkbook control. With American IRA, they are very supportive of this feature. So there are pros and cons to most providers.
The reason I like checkbook control is that many times in real estate investing you need your money quickly. If your money is “Administered” it means that each time you do a deal, you have to send in the deal to that Administrator and they will check the prongs of your deal to make sure you are investing properly so as to not expose your IRA/401K. This is based on someone who may make a mistake and violate the law and expose their full retirement account.
Each time you do a deal you will need to fill out the paperwork and then send it in to your administrator. This takes time and costs money. They will all tell you that they will get back to you, in most cases within 24 hours, but the truth of the matter is that it normally takes days because you are tied up with the bureaucracy. I have seen deals lost because of the time it takes to jump through all of their hoops.
On the other hand, if you have checkbook control, you control every financial transaction - from writing a check to wiring funds. Very fast and easy. The question you need to ask yourself is - “How well do I know what I can or cannot do with the IRA/401K?”
In our case, in order to avoid complications, most of my clients just lend the funds to an investor/flipper. Because they fund only, this makes any 401k questions obsolete. Most of the buyers we have in our group pay 12% and 3.75 points to the lenders. This is a solid way to make money. Remember here, the key is to make sure you know what you are doing. If you do, then you are safe. Many of the people I work with have IRA’s/401K’s. They all know the rules pretty well. They all network with each other and normally choose to operate on the safe side of things.
In the end, I think most IRA/401K companies are created equal. Their fees are about the same. They all claim to do it better than the other guy. What I have seen is that they all administer at about the same pace with similar fee structures. The thing that makes the difference to me is the one that will set you up in the self-directed checkbook control situation, but you must be a savvy IRA/401K investor or have people around you that know what they are doing.
I ended up ripping 200k total out of our 401k's without the 10% penalty because of covid-19 cares act
Hey Marty,
Just took 84k myself.
Yeah purchasing a couple more properties...it's a no brainer without the penalty because we have 3 years to pay the taxes on it plus I am growing that money a lot faster than this stupid stock market.
Tired of waiting around all my life for something that is clearly not gonna happen in the stock market...which is financial freedom. Life is too short to wait around IMO
I couldn't have said it better myself. I like having control of my money.