{ "media_type": "text", "post_content": "I need liquidity for an upcoming down payment for a house. I’m looking to rollover 401k from a previous employer to a self directed IRA as one of the options. Anyone has insight into pros and cons of such a rollover and if there are other options I can use to generate liquidity out of my previous employers 401k?", "post_id": "61ad22e6f53db60026cdc16e", "reply_count": 9, "vote_count": 2, "bowl_id": "59064a3cb12379001006592c", "bowl_name": "Personal Investment Chatter" }

I need liquidity for an upcoming down payment for a house. I’m looking to rollover 401k from a previous employer to a self directed IRA as one of the options. Anyone has insight into pros and cons of such a rollover and if there are other options I can use to generate liquidity out of my previous employers 401k?

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Pretty sure self directed IRA can be used on real estate but with at least two major caveats. You must pay for the whole house, not a downpayment. 2. It can’t be your residence.

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Just bought a place. Recommend you roll everything to your employer 401k and avoid taxes, if you have enough future earnings to pay it off in a few years.

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Take a 401K loan? Didn’t get the context

I don’t think AD1 is correct. See https://money.usnews.com/money/retirement/iras/articles/how-to-use-your-ira-to-buy-a-house

If you rolled it into your employer 401k you could then take a 401k home lone. Not the greatest idea but better than paying penalties and exit taxes on cashing out that rollover. Also at this time with the peaky equity markets you may end up ahead if the money is in a loan when the markets crash. Then you dollar cost average back in as you repay the loan.

@MD1 I’m only talking about the self directed IRAs he mentioned. Please disregard what I said if using a regular IRA. It seems you actually can use it as a downpayment but only for a non recourse loan, not a 20% down type of thing. https://www.investopedia.com/articles/personal-finance/111615/using-your-ira-buy-investment-property.asp

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Yep I agree, it seemed like they were talking about primary. Just wanted to let him/her know self directed isn’t an option for that; they’re all the rage since the Peter thiel thing

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