401k for business down payment

QUESTION: I'm interested in buying a restaurant that is about $350,000.  I currently have $200,000 in my 401K that I wish to use.

I understand that the way to do this is to open up an C-corp, and have the c-corp be owned by my 401K.  However,  I'll need a loan of about $150,000.   My accountant told me that that I cannot be the guarantor of a loan because it would nullify the 401K ownership.  Is this correct?  Have you seen clients where they use the 401K as a down payment, and then have the c-corp take out a loan with them as a guarantor?

  

ANSWER: Yes it is possible. Please set up a call to discuss further.  Please visit following link and click on "Book Now" button.

http://www.mysolo401k.net/401k-small-business-financing.html

Any guidance would be greatly appreciated!

Larry in Texas

Can I Invest ROBS Self-Directed 401k in Farm Land for home use

BACKGROUND: I would like to buy a farm in Maryland and live on it myself. I would like to use the money in a rollover IRA account to purchase the farm and some equipment. I see that a C corp is what I need to form but I’m confused about how to use my money to purchase the property. A solo 401k cannot be used because I want to live on the farm and I’m disqualified. The same would be true about a self-directedIRA.

There is also an office, woodshop and apartment for rent on the farm property. The actual farmhouse will be rented for about 9 months until the current tenant’s children get out of school next June. And then we would move into it.

Some of the farm land will be rented out to other farmers for the first few years and if that works out it may continue for as long as they need the land.

QUESTION: Is there a way that I can form a C corp, use my rollover IRA money to finance the C corp to purchase the farm and allow me to live on it.

ANSWER: While you can invest your retirement funds in a farm in which you will work (commonly referred by the IRS as roll over business startup), you cannot use your retirement funds to purchase a farm on which you and/or your family will live. 

Regards,

John in Maryland

2012 Study points retirement funds will double by 2020 | Fund business with retirement funds

Recent research performed by LIMRA points that investable retirement funds of US households age 55 and up will double to $22 trillion by 2020.  LIMRA’s findings further divulge that in 2010 the retirement assets of households aged 55 and up held $12 trillion. The publisher goes on to detail that these households plan to invest in in products that will generate retirement income.

These findings are in line with Mysolo401k.net review of its book of 401k business financing clients whom mostly appear to be in their late 50s and are using their 401k funds to finance a franchise that has a proven track record.