馃攳
How to Buy Real Estate With Your 401K | Investing for Beginners - YouTube
Channel: unknown
[0]
how can you buy a rental property with
[2]
your 401k that's today's video let's get
[4]
to it
[8]
hey everybody I'm Clayton Morris I'm the
[10]
founder of bor氓s and vasta turnkey
[12]
rental provider and I'm a long time real
[14]
estate investor and I've done hundreds
[16]
of rehabs and I own many many properties
[19]
so today I want to talk about how to buy
[22]
a rental property using your 401k now I
[25]
said at the top that I own many rennie
[26]
many rental properties and guess what I
[29]
buy many many rental properties using my
[32]
401k well how in the world do you do
[34]
that well it's a killer strategy and you
[38]
may hear from people in the Dave Ramsey
[39]
world and others who say never touch
[42]
your 401k never use your 401k for
[44]
anything
[45]
well I totally disagree with that
[47]
because it's your money sitting there in
[50]
a fund that your employer had selected
[52]
and it's your money and for the most
[54]
part given the stock market craziness
[56]
I'd much rather be buying real estate
[57]
with it then sitting there at the whims
[60]
of the market where it's going up and
[61]
down and all over the place get me a
[63]
real cash flowing asset any day of the
[66]
week in a rental property I'll take that
[67]
9 times out of 10 actually no I'll take
[70]
that 10 times out of 10 so how do you
[72]
how do you do it how does it work well
[74]
anytime anyone says use your 401k alarm
[78]
bells go off and people get all freaked
[80]
out what I'm gonna use my 401k but
[82]
that's sacred to me well here's the
[85]
difference
[85]
we are not withdrawing from your 401k
[89]
when you withdraw from your 401k you can
[92]
do that during a hardship right like
[94]
perhaps a death in the family or
[95]
foreclosure you're facing you can
[97]
actually do a withdrawal from your 401k
[99]
and then you're taxed on that money
[101]
that's not what we're talking about here
[103]
you can also do that when you're turning
[105]
59 and a half you can withdraw your
[107]
money from your 401k and start using it
[109]
in paying taxes on it as well
[111]
again not what we're talking about what
[114]
we're talking about is borrowing from
[116]
your 401k
[119]
how can I borrow from my 401k well I've
[123]
been beating this drum so much on my
[125]
podcast by the way the link if you want
[127]
to listen to my podcast it's a weekly
[128]
podcast it's in the show description
[130]
below it's called investing in real
[131]
estate I talked about this with a lot of
[134]
experts who actually help you construct
[136]
these plans so you should go ahead and
[138]
listen to that we're talking about
[139]
borrowing from your 401k and most of
[142]
your 401k providers or I think all of
[145]
them frankly will let you borrow and
[147]
then you pay it back and what's great
[150]
about this strategy is number one it's
[151]
your money okay so you're not borrowing
[154]
it from a bank you're not borrowing it
[156]
from Wells Fargo or some other source
[157]
you're borrowing it from the bank of you
[159]
which is great secondly you have to pay
[164]
interest on that money but guess what
[167]
because it's mortgage interest you get
[169]
to write off the interest that you're
[171]
paying yourself so it's twofold not only
[173]
are you borrowing the money from
[174]
yourself you also then get to write off
[177]
the interest that you're paying back on
[179]
that loan to yourself it's your own
[181]
interest so at the end of the year on
[184]
taxes you get to do that it's a double
[185]
whammy I actually kind of think of it as
[188]
a triple whammy because you know what at
[190]
the end of the day you're also getting
[191]
to buy a rental property with that money
[193]
I do it every year and I have many of
[197]
our investors who purchase properties
[198]
through us at Morris invest also use
[201]
their 401k to purchase rental properties
[204]
so how does it work well it's very very
[206]
simple
[207]
in fact my mother-in-law recently did it
[209]
and she was shocked at how simple it was
[210]
so for instance I use a company like
[212]
fidelity that's who runs my 401k you
[215]
simply go to the website you click on
[218]
the borrow tab and then from there you
[221]
click on how much you want to withdraw
[223]
or how much you want to borrow and it
[225]
literally will move it right into your
[227]
account with like a day or two it's that
[229]
simple it's your money and it's
[232]
transferred very very quickly again my
[234]
mother-in-law said I can't believe how
[235]
easy this was it really is well then
[239]
what happens is you pay it back out of
[241]
your payroll so every time your paycheck
[244]
comes you're gonna notice that there's a
[245]
401k loan
[247]
and that will pay back to your payroll
[250]
department out of your out of your
[252]
weekly or bi-weekly check that you
[254]
receive from your employer the other
[256]
thing that of course you'll want to do
[258]
is pick how long it takes you to pay it
[260]
back
[261]
so most 401k providers will give you 12
[264]
months 24 months or etc so you pick the
[268]
timeframe on how quickly you want to pay
[270]
back your 401k loan you don't have to
[273]
pay it back quickly if you don't want to
[274]
you can stretch it out into a couple of
[276]
years typically and then once it's paid
[279]
back once you've paid back that full
[281]
amount boom you can rinse and repeat and
[283]
then you can do it again now most 401k
[286]
providers have different limits on how
[288]
much they'll let you withdraw for me
[290]
they let me withdraw $50,000 $50,000 is
[294]
the most that I can withdraw which is
[296]
fine because the houses that I like to
[298]
buy are in the $40,000 range so I can
[300]
withdraw that amount and then once I pay
[303]
it back in a year or two I rinse and
[305]
repeat and I borrow it once again and
[307]
buy another rental property so it's a
[309]
killer way for you to kickstart your
[312]
real estate investing most people don't
[313]
even know that they can borrow from
[315]
their 401k without penalty again there
[318]
is no penalty doing it this way it's
[320]
your money sitting there why not
[322]
leverage it I'd love to hear your
[324]
thoughts and comments have you ever
[325]
purchased a real estate property using
[328]
your 401k I'd love to hear about it you
[330]
can do so in the comment thread below
[332]
you can also subscribe to the channel
[333]
because right here is the big red
[335]
subscribe button click on that we have
[337]
videos that we publish multiple times a
[339]
week all about real estate investing
[341]
helping you become a better real estate
[343]
investor and learning how to create
[345]
positive passive income in your life go
[349]
out there take action and become a real
[350]
estate investor we'll see you next time
[352]
everyone
Most Recent Videos:
You can go back to the homepage right here: Homepage