BACKGROUND: I’ll be
leaving my current employer and rolling over a 401K program of $180,000. I will likely need to pull some of
these funds as a loan to bridge me
to next job or until I set up a successful business. I’m planning to invest in real
estate for income – rentals and flips, however my understanding is a Solo401K is not a proper vehicle for
this.
ANSWER: The ROBS 401k not the solo 401k allows for investing in
one's own business. The business activity that you are describing appears to
fall under the real estate operating company (REOC) umbrella. I order to qualify for the ROBS 401k, the REOC must satisfy the following requirements.
a. At least 50 percent of the assets of
the corporation, valued at cost, must be invested in real estate which is
managed or developed and with respect to which such entity has the right to
substantially participate directly in the management or development activities.
b. Such entity in the ordinary course of its business must be
engaged directly in real estate management or development activities.
Lastly, a 401k participant loan may
be taken from the ROBS 401k and the 401k loan funds may be used for any purpose
including for paying living expenses.
Vick in California
More Information
I am very grateful to Elegant loan firm for helping me get a $ 600,000 loan with the helping of loan officer Russ Harry, and I will always be grateful. My life has changed, my money has been paid, I now own a business that I used to support my family. I am grateful to you, Mr. Russ, and God bless you. You can contact them for your financial assistance by e-mail: Elegantloanfirm@hotmail.com for your financial assistance.
ReplyDelete