I would like to get the funds out of my 401k to purchase more rentals.  I love this business and think I could do better than my broker.  Is there a way to do this and not get hit with a penalty?  Leave the RE in a retirement account until 65.  

Yes of course. You have to make sure you have checkbook control in your 401k account. Do you have checkbook control?

I don't know about others but My 401k allows for a max loan limit of 50K for 60 Months all interest is payed back to you.... The only penalty is if you cannot pay the loan back you get hit with a stiff tax bill... its also believed that you will be "Double taxed" since your paying the loan back with after tax dollars however, depending on your purchase deal its probably worth it...  

@Vic B.

The first question is whether the 401(k) you mention is eligible for transfer. If you are still working with the employer that sponsors the plan and under age 59 1/2, the answer is likely no. If the 401(k) is from a former employer, or if you are over age 59 1/2, you should have the ability to transfer all or part of that 401(k) to a self-directed IRA or 401(k) plan.

There is a lot of information here on BP about such self-directed plans, and several providers of such plans who actively participate and can help you learn more about your options.

The basic principal with such plans is that the IRA/401k can be diversified to hold investments in non-traditional assets such as real estate, private mortgages, etc. The tax-sheltered status of the retirement plan remains in place. All assets are owned by the retirement plan (not by you personally). All expenses are paid by the plan and all income produced accrues tax-sheltered under the umbrella of the plan.

I know you can do a hardship if you're purchasing a property or primary residence they really don't know what kind of property are you going to purchase I know you can take half of what you have in your 401k

@Vic B.

If you are still working for the employer that sponsors the 401k and if you are under age 59 1/2, chances are you won't have access to those funds. 

On the other hand if you have met one of the above triggering events, you can take distributions but taxes will app. See the following.

https://www.irs.gov/retirement-plans/plan-participant-employee/401k-resource-guide-plan-participants-general-distribution-rules