EP079: How a New Investor Used His 401k to Buy His First Property [Case Study]

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Many potential investors hesitate to make their first purchase because of a perceived lack of financial options. However, there are always options, and one that is often overlooked is taking a loan from a 401k. Today’s guest has done just that, and is on his way to achieving financial freedom!

On this episode of Investing in Real Estate, I’m sitting down with new investor, Kevin Brooks. Kevin is here to share how he finally took the plunge into real estate, and how he financed his properties by borrowing from his 401k. We’ll discuss how to pay back a 401k, the terms of the loan, and the lessons Kevin has learned along the way.

More About This Show
Kevin Brooks is an LA-based investor, and the father of two young children. His family was his impetus for investing, as he wanted to spend more time with them. He had been thinking about real estate investing for a while, but this year in January, he decided to set a timely goal—to purchase his first property by June 2016.

Once he started putting his energy toward making his goal happen, everything fell into place. He exceeded his goal, and purchased his first property in February. Kevin’s story is a testament to the power of taking action! He booked a call with Morris Invest, and he and I talked about his goals.

I showed Kevin a couple properties to think about, but he had one major uncertainty—money. Like many people, Kevin didn’t have $36,0000 sitting around to purchase a home. But once he realized he could simply take a loan from his 401k, the idea of purchasing the property became a reality.

Withdrawing a loan from his 401k was a simple process. He initiated a direct deposit online, and chose a repayment plan. Kevin’s funds were available within a few business days, and before he knew it, he was a real estate investor!

Kevin now has two buy and hold real estate properties, and doesn’t plan to stop anytime soon. He has calculated his Freedom Number to be approximately 20 properties.

Today on the show, Kevin is elaborating on his journey into real estate investing. We’ll discuss the finer details of his investment properties, the obstacles he’s overcome, and much more. Kevin’s drive and passion are an inspiration; don’t miss episode 79 of Investing in Real Estate!

If you’re feeling inspired by Kevin’s story, and are ready to take action, we’d love to hear from you. Book a FREE call with my team today. We’re here to answer your questions, and would love to discuss how you can make your investing goals a reality.

On this episode you’ll learn:

  • How do you initiate a 401k loan request?
  • How can you make sure your investment will generate positive cash flow?
  • Can you invest in real estate if you’ve undergone foreclosure?
  • What are some other creative financing options?
  • How to calculate ROI from a real-life example.
  • And much more about buy and hold real estate!

Episode Resources
Drobo
EP006: The Best Properties are NOT in Your Backyard
EP070: How to Evaluate Debt Service on a Rental Property
EP073: How to Get Your Spouse on Board Your Real Estate Journey
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