February 2, 2023

A New Way to Invest that Should Pay Dividends – Solo 401k




 Real Estate Options with Solo 401k and Self Directed IRA

Have you been looking into real estate investment as a possible opportunity for increased revenue and portfolio expansion? If so, what’s holding you back? For a number of people, it could be the initial investment to purchase and fix up the home. So where could you get the money? Many will take a look at their 401K or IRA and consider this route, but will be scared away by early withdrawal penalties and taxes. Sadly, this is counter-intuitive as this money could be used to better sustain your retirement, which was the point of the IRA and 401K to begin with.

Well, there’s good news for those of you with IRAs or 401Ks who want to make investments directly into real estate.¬† If you’re looking for a viable way to free up money to take advantage of a real estate investment, you should definitely consider a self-directed IRA or Solo 401K. A self-directed IRA establishes a specialized retirement account that allows the funds in the plan to be transferred into a business checking account of your choice.

Thus, the IRA holder has checkbook control over their retirement funds. With control of your investments, you may choose to move money in and out of your account without worrying about penalties. With a self-directed IRA, the rents received are tax-deferred or in the case of a Roth IRA, tax free. What about capital gains? Just like the rents, they’re considered a return on investment, so any capital gain is tax free or tax-deferred as well. With this in mind, what is an area that you might want to consider for real estate investment using your self-directed IRA or 401K?

You might want to look into rentals for retirees. That’s because traditional retirement cities are about to get many more guests. America is becoming older as a nation, and 76 million Baby Boomers will soon hang up their hats and coast towards their Golden Years. Many of them will venture off into new locations that they’ve always wanted to go to. These might be places that offer warmer weather, a more relaxed atmosphere or proximity to other family members. Most will be reluctant to purchase a new home and get stuck with another mortgage, so they’ll often choose to rent instead. So where are some of these locations to be considered for investment?


The Huffington Post recently listed the 15 top spots for real estate investment that take advantage of the recent influx of retirees. While we won’t list all of them here, the list was pretty definitive by stating where retirees are going. The top spots went to traditional retirement destinations like Florida and California. However, the list is inclusive of cities across the nation in states like Pennsylvania, New York, Oregon, Arkansas and Arizona. The Boomers seem to prefer locations known for warm weather, favorable taxes and cultural attractions. If you’re looking to invest in real estate with a self-directed IRA or Solo 401k, these states should be on your radar.