In other words, you CANNOT house hack with your 401k or self directed IRA. Despite what I said above, you can still use your 401k to house hack. This can help with your down payment on a house hack.
This is for investment property only so most lenders will require at least 15% down and sufficient cash flow. You will be paying your solo 401k interest of approximately 4.0%.
Rather than having your 401k held with a financial advisor and being diversified amongst asset classes that return ~7% annually, you can move it to a self-directed IRA or a solo 401k to manage yourself.
With these self-directed accounts, you can invest in anything.
It will just be an added bonus as you hit your “golden years.” As a Millennial, my initial thoughts aligned with these young folks.
However, I do highly regard the advice of my elders, so before fully advocating for this, I figured it would make sense to do an analysis to see if the numbers make sense and to explore some other options.
In the first part of this article, I show you the analysis I performed comparing what your annual returns would need to be as a 25-year-old taking out your 401k to start investing in real estate.