EP016: How to Buy Real Estate with Your 401k - Interview with Natali Morris

I’ve mentioned briefly on the podcast that one option for investing in real estate is to borrow from your 401k. Taking out a loan from your retirement plan allows you a large chunk of money with which you can purchase an investment.

Today we’re diving deep into the topic of 401k loans with Natali Morris. She’s sharing misconceptions about 401k accounts, and how you can use yours as a tool in your investment arsenal on episode 16 of Investing in Real Estate!

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Most 401k plans allow for the contributor to take a loan, under certain terms. Typically, there is a maximum amount that can be withdrawn, and the loan must be paid back within one to two years.

Many people are afraid of this idea. We’ve all heard it before; society tells us that we should not, under any circumstances, touch our 401ks.

The truth is, there is little risk in borrowing from your 401k, and it can be a resourceful way to purchase real estate investment properties. By doing so, you’re taking that money and turning it into a performing asset.

The repayment is automatically deducted from each paycheck. Not only are you borrowing from yourself, you’re also paying interest on the loan back to yourself.  It only makes your retirement account larger in the end.

Borrowing from your 401k is a surprisingly simple process. It only takes a few clicks, and you can have part of your balance transferred to your bank account within a couple weeks.

Although many investors warn that you shouldn’t mess with your 401k, it’s how we’ve built our real estate investing business. It’s worked for us, and it could be the right decision for you too.

Today on the podcast, we’re sharing our experience borrowing from a 401k to invest in real estate. Natali also goes into detail about the different types of 401ks, how to make the right decisions for your finances, and how to weigh the opportunity costs of a 401k loan.

If you're ready to begin building a passive income through real estate,

We’re ready to talk about your goals and want to help you learn more about earning legacy wealth for you and your family.  

On this episode you’ll learn:

  • What can you use a 401k loan for?
  • How can borrowing from your 401k be beneficial?
  • How to determine if using your 401k to invest in real estate is right for you.
  • The differentiation between withdrawing and borrowing.
  • Two instances in which you should not borrow from your 401k.
  • And much more!

Episode Resources
John Oliver on Retirement Plans
How to Borrow from Your 401k to Invest in Real Estate by Natali Morris
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