Outright Investment/Purchase of real estate by Solo 401k or Individual 401k

From rentals, fixer uppers, for flipping, condos, commercial property, single-family homes, apartment buildings, foreclosures, pre-foreclosures and properties requiring repairs or rehab, all these types of real estate can be purchased outright with just Solo 401k or individual 401k funds. Here’s how:

After you open solo 401k and assuming your Solo 401k has available funds to cover the purchase price as well as insurance, taxes, closing costs, and so forth, your solo 401k can purchase the property outright. Further, since the property is owned 100% by Solo 401k or Individual 401k, all ongoing expenses have to be paid solely with solo 401k funds not personal funds.  Of course, all income/profits from the real estate investment also must be returned to the solo 401k.

Since solo 401k or Individual 401k owns the property outright, make sure to plan ahead for any unexpected surprises, such as repair expenses. Put simply, funds outside the solo 401k (e.g., personal funds) cannot be utilized since solo 401k owns the property outright.

However, if your solo 401k runs into liquidity problems, you can transfer/rollover other retirement accounts such as IRA, 401k, 403b, and other pension plans to Solo 401k.