Using Solo 401(k)s for Real Estate |
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Using Solo 401(k)s for Real Estate

Investors who want to buy real estate using a 401(k) have multiple options as long as the account is qualified. A typical investor has a retirement account that is tied to an employer in the U.S. For someone who is self-employed, buying real estate using retirement funds can be more complicated. Some investors are now finding ways to buy using solo 401(k)s for real estate.

AKA: One-Participant 401(k) Plan

The IRS officially refers to a solo plan as a one-participant plan or a Uni-k plan. These might be unfamiliar to the average worker although many of the rules for these accounts are the same. There are advantages for someone working independently who holds a solo account and plans to become a passive investor.

Single retirement plan benefits:

1. $17,500 to $23,000 Contribution Limit in 2014

2. Covers Spouses

3. Tax Deferral

4. Can Be Rolled into a Roth IRA

5. Up to $50,000 Can Be Borrowed

6. Can Contribute as Employer and Employee

The single or solo account is available to a business owner who has no full-time employees. This means that a person can setup an account relatively easy using a qualified trustee. Both pre-tax and after-tax accounts can help build the entire wealth of a one-participant retirement account for later use with real estate.

Purchase a Rental Home with 401(k)

Regardless if a person has an LLC, S-Corp or sole-proprietorship, buying real estate for use as a rental is possible. The conversion of a non-qualified retirement account into a qualified account can be completed by a selected trustee. It is possible under current IRS rules to own real estate as a passive investor and fund this investment with select retirement accounts.

Aside from purchasing a rental home to build profit, someone who has a single 401(k) account can make other investments that are approved by the Internal Revenue Service. These include the following:

1. Most Stocks

2. Mutual Funds

3. CDs

4. Coins or Metals

5. Foreclosures

6. Tax Liens

7. Land

8. Commercial Real Estate

A Solo 401(k) Real Estate Purchase Guide

JWB has created and published its guide to passive investing in the U.S. using its unique investment platform. This guide can be accessed from this page by any investor in the global marketplace. Learning to become a smarter investor is easy with a great group of mentors. The JWB Real Estate Capital team uses this website as a complete resource to educate potential purchasers of turnkey properties from its current network.

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