Loan Solo 401k for flipping home or house

QUESTION:  I have an opportunity to loan $100, 000 to a fix and flip investor over 6 months at 14%. If I understand correctly I can use only $2500 from my Fidelity Solo 401k ($5000 balance) by writing a check? Then I plan to use $50,000 from my Fidelity Traditional 401k and $47,500 from my regular savings account for the balance. Is this in order? 

ANSWER: If you are making the loan investment through the solo 401k, the full amount in the solo 401k can be used. Why is this? Because it would be considered an investment by the solo 401k. Therefore, the solo 401k would be listed as the lender. Further, all the promissory note payments would be deposited back into the solo 401k bank or brokerage account. Please click here to read our sample promissory note investment procedure. With regards to the rest of your questions, the other 401k plans would first need to be transferred to the solo 401k if you need the full balance to make the promissory note investment.

Thank you,

Brenda in New Jersey

contribute to 403b and 401k plan

QUESTION: We are trying to find a way to get my wife's old 403b plan from a previous employer, and her existing standard IRA  into a solo 401k, like the one you set up for me. If we set up a side business for her (she is an Rn who is making annual 403B contributions of $ 22,500 through her hospital employer that shows 5-10K on income, can she still do the another 22.500, or is the contribution amount even in the employee type 1 contribution limited to the net income. .Is it also affected by her ongoing 403b contribution. 

Do you have any other possibilities?

Tim in Minnesota  

ANSWER: Assuming your wife can setup a side business for self-employment purposes, she may open a solo 401k. However, her type 1 contribution cannot exceed $22,500 (this is the 2014 salary deferral contribution limit including the catchup) for both plans combined (her 403b and her solo 401k). We can discuss further over the phone when you are ready.

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Contribute To Multiple Employer Plans

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