Can I Use 401k For Real Estate Investment? - YouTube

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.