Many real estate investors choose to have a Solo 401k so that they can invest their retirement funds in real estate or other assets of their choosing. The real estate Solo 401 k plan offers many flexibility and control. For example, the plan owners also play the role of a plan trustee, which means they can make investment decisions without getting approval from anyone. Real estate purchases can be funded as easily as signing a check.
One of the biggest advantages of a real estate Solo 401 k is that it also offers plan owners the ability to leverage their investments. Plan owners can use a non-recourse loan to finance their property held by a Solo 401k without paying extra tax or penalty. Let’s take a look at this option in the Solo 401k Quick Tip video below:
Real Estate Solo 401 k: Leverage with Non-Recourse Financing
Non-recourse financing must be used to acquire real estate investments for your Solo401k plan. Non-recourse lenders usually require 30 to 50% down-payment. You will also need to show that you have sufficient reserves in your retirement account. Each lender may have a minimum loan amount. You will need to contact the lender directly for more details about this minimum amount and other requirements.