All Forum Posts by: Andy Bailey

 Thank you all of you guys for helping me out...

But here is another question...

I wonder if borrowing from 401K makes sense if you want to buy real estate...

1) 401K approach:

For instance, Ive been maxing out my 401K for the last 4 years.(I think it was closer to 4 years) I have about 100K now, roughly...That is the money that are my money that I put into it...

2) equity approach :

Lets say, if I bought 4 houses (1 house per year), houses went up probably 50K-100K, so I would have made 400K... ANd it would not be my money that I had to put in, it would be money made from nothing (equity)...

3) Cashflow approach:

Lets say, instead of putting 18K into my 401K for the next few years I will buy a fourplex per year. lets say each fourplex cashflows500$ per month. that is better return, right? What if it cash flows 1k per month? That is approximately 10-12K cashflow per year. 401K cant give me such returns on my 18K, right?

Am I trying to save 5K in taxes (that is how much maxing out my 401K saves me in taxes per year) by investing in 401K but I am losing 10K per year per fourplex in cashflow? 

Seems like cashflow approach is winning, right?

I just feel like I cant max out my 401K and buy real estate at the same time. I can go for company match (which is 4% and just put 4% monthly), but not sure if it makes  sense to max out 401K...May be I should just just try to buy real estate that cashflows?