Can I Use 401k For Real Estate Investment?
Articles,  Blog

Can I Use 401k For Real Estate Investment?

Hey, welcome back friend. My name is Kris
Krohn. And today, we’re talking about 40Ks and what it looks like to maneuver
that money into real estate. I’ve moved tens of millions of dollars into real
estate from 401Ks, IRAs other qualified accounts. And today I’m going to be
sharing with you the 3 options of what you need to know about 401ks. Can you put
it in real estate, what types of real estate. What’s really possible for you? So, for those of you that are new to the
game, 401k is probably one of the most popular concepts of a retirement account
that businesses are using these days. Originally we all had farms and we it
was all a very agrarian society. And today we’ve moved ourselves off of our
farms. And we’ve been loaded into the workforce after the Industrial
Revolution with our own self built pensions. And what companies will do is
they say, “Hey, if you work for us, will actually give you a match on your 401k.”
And it’s a way for them to retain an employee longer and it’s a way for you
to feel like you’re building something towards retirement. And in very few cases,
it actually is. My personal experience though having actually interviewed over
10,000 of hardworking Americans that have put their money in 401ks that have
been doing that for sometimes 10, 20 or 30 years, is that when you get to the end,
guess what the math really looks like? Simple. Not enough. So, that might be one
of the reasons why you’re watching today’s video because you actually want
to know what are my options with my 401k because I’m starting to do the math and
I’m realizing that I’m contributing and I’ve maxed out my company match. But it’s
not getting me where I want to go. Before I can give you your 3 options, I want
to just give you a little bit of pattern interrupt. Something a little
uncomfortable perhaps on something that I feel like you really need to know and
understand. The match feels good. But if it’s not enough to reach your goals then
does it matter. Well, more money is more money. Yeah, but
not inside of a broken system that you’ve done the math and you already
know it can’t be enough to get you where you want to go. So, the question is does
that match actually make sense if in the end it’s taking all of your available
money and locking it up and it’s not going to be what you need it to be. This
is what has got to get you thinking a little bit about what are my options? You
see take it from me, a guy who has done 4,000 homes in the real estate arena,
never contributed money to 401k or IRA because I already knew that the
math was broken. I already knew that at the rate of 401k earns tied to
the market in every 10 years hitting the cycle, that at the end of the day and
especially depending on when your retirement is, you have no idea how to
time that market, when that thing’s going to crash on you. And the average person’s
got like 50 grand and their 401k after all their working years. Maybe you got 100 grand. maybe you have $500,000.
But will $500,000 be enough for retirement? That better not be your only
plan because for most of us like 99.9% of us is not going to be enough. So, let’s
talk about what some of your options are with your 401k. The first thing that I
want to do is I need to help you understand a couple of basics so you can
self diagnose in this video what your options are. Because in the game of real
estate, if I help you buy 20 homes and you’re now making $10,000 a month
residually, you might not need that job anymore.
But you’re going to need some seed capital make that happen whether yours or
somebody else’s. A 401k is a perfect place to look for real estate seed
capital. So, here’s the first one. You have what’s called a rollover 401k. Rollover
means that that 401k was built at a different company. You’ve switched jobs
and you’ve just rolled it into your next 401k. If you’ve rolled it in, it’s
actually still separate. So, let’s just say hold it you actually have $50,000
that you had built up from a previous 401k, quit that job started at a new job
and then you moved it into a new one. Part of your 401k is actually rollover
that you have access to. And I need you to understand this distinction because
if you have a current job number 2, your current 401k likely has
restrictions where you can’t touch it. Now, there are always exceptions to the
rule in about 10% of the situation’s. So, I want you to listen carefully. if you
have a 401k rollover from previous employment and you take it out, all you
have to do is pay tax and penalty. The penalty is 10%. Sucks but it’s a cost of
business. And tax and penalty, that’s a hefty price to pay. But you need to
understand that you’re you’re always going to have to pay taxes no matter what.
You can’t get over that. You and I doesn’t… There’s no age at which that goes away.
There’s an age at which your penalty goes away but trying to save 10% on the
penalty is not worth the opportunity cost of what you’re missing out on today
with today’s investment choices. So, a rollover is a great way to fund real
estate and I’ll give you some ideas in just a second. Your current 401k on the
other hand though. You need to talk to your HR human resource person and say,
“Hey can I pull that out?” And 90% of the time they’re going to say, “You can’t touch
that.” I want you to write down these words. “Can I do an in-service
distribution?” That’s the key language. And if they say yes, it means that you
actually can pull your money out but you’d have to pay
tax and penalty. Either, pay the tax and penalty and get your money out in the
open air where it can breathe and come off a financial life support. Or you can
try and put it in what’s called a self directed 401k. A self directed 401k does
not trigger paying any tax or penalty. What you’re basically saying is, “I no
longer want you in the stock market. I want to pull you out and I want to
direct where you go.” And then you have limited options of where you can direct
it. You could for example direct it into real estate but problem is is that that
real estate needs to number one, it needs to be paid off. So, if you’re rich or you
have a lot of money, this is a great option. You don’t have to pay your taxes
and you can put it in a paid off real estate. The reason why I say paid off or
if you’re rich is because when you don’t have a lot of money, guess what you need
to do you need to grow your money. And if you want to grow your money, you need to
actually be able to free it. Self-directed stewards will actually
tell you that you can actually take that 401k and get what’s called a
non-recourse loan so that you can use leverage which means put 20% down. But
I’m just telling you right now, those banks hardly exist. They are in rare, rare
form. Which means that you either buy paid off real estate or you’re doing the
same thing you’re doing up here which is what? You’re pulling it in the
marketplace. For some of you, you’re watching this video you’re like, “Kris,
that sounds like a whole lot of bad news.” No, it’s a frame of mind. Let me share
with you the good news. The good news is you are habituated into growing your
money at 3, 4, 5, 6 percent. And if you average it all out, it usually averages less than 5%.
That’s the sad news. The good news is that if you pull it out by paying your
taxes what you’re always going to have to pay anyway. Plus that little penalty
then your money is actually free to do something for you. I can show you for
example how to put that in the game of real estate where you can be earning 25%
a year on your money. Now, that is a claim but that’s actually based on my last
4,000 home track record and I can back that up. I can share that with you. So, if
you for example click the link below, you can actually talk to a member of my team
and what they can do is they can inform you about some of your options. I go into
the very best markets nationwide that’s how I get those really high ROIs. And what
I do is I have a trained team of 200 experts that will go and actually build
my portfolio for me. And if you want to learn about that, if you want to learn
about partnering with me or what you can do to access
inventory, all you got to do is check out that partnering page in the link below.
Talk to a member of my team and have them explore what your options look like.
Because here’s the reality, 401k, IRA annuity, that is the financial planners
model for retirement and it is not enough. Do the math. Pull out a calculator.
You don’t have to be smart at math. You just have to have made it past third
grade so you can do some basic addition and be like, “What am i putting in every
year? How’s it growing? Is it going to be enough?” For most of you it’s short by 80
or 90%. So we already know the answer which means it’s time to explore
alternatives. Now, I might be that alternative or someone else might be. But
either way, free it from the market, free it from the Beast that isn’t working. In
the link below, I’ve also provided a free copy of my book. I’ve written 4 books
I’m a best-selling author. In this latest book, it’s really short and it’s all
about how you can take your money from 401ks, IRAs and make a million dollars
with it. So there’s a lot of valuable information in there. So either get your
hands on a copy of the book or talk to a member of my team and say, “Hey, what would
it look like to access Kris and his inventory to be a part of his next 4,000
homes that he’s buying?” And we can give you that information and see if we’ve
got to fit there. Thank you so much for watching today’s video. I hope it was
going to… Hope it was informational, I hope it answered your question. What I want
you to do right now is give it a thumbs up if you liked it. Share it with someone
that can use it. And videos like this come out every single day for me.
Which means all you got to do is subscribe, ring that bell and I’ll be
able to notify you what tomorrow’s video is. Because it’s all dedicated towards
you achieving financial freedom so that you can live your purpose the way God
designed you to be, take care.


Leave a Reply

Your email address will not be published. Required fields are marked *