Can you use a 401k to invest in a multifamily deal as a limited partner?

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Yes, you can use a 401(k) to invest in a multifamily deal as a limited partner, but there are specific rules and requirements that must be followed. To do this, you would need to use a Self-Directed 401(k) or Solo 401(k), which allows for greater flexibility and control over the investment options. Unlike a traditional 401(k), a Self-Directed 401(k) lets you invest in alternative assets such as real estate, including multifamily properties.

Here are the steps you would need to follow to use your 401(k) to invest in a multifamily deal as a limited partner:

Set up a Self-Directed 401(k): You will need to work with a financial institution or service provider that specializes in setting up Self-Directed 401(k) plans.

Rollover your existing 401(k) or other retirement funds: You will need to transfer your existing retirement funds from a traditional 401(k) or other eligible retirement accounts into the new Self-Directed 401(k) plan.

Find a multifamily investment opportunity: Identify a multifamily property or syndication that you would like to invest in as a limited partner. Make sure to perform thorough due diligence on the property, the sponsor, and the overall investment structure.

Invest in the deal: Once you have identified the multifamily investment, use the funds in your Self-Directed 401(k) to invest as a limited partner. Ensure that the investment is made in the name of the 401(k) plan, as it is the legal owner of the investment.






Comply with IRS rules and regulations: It is essential to follow all IRS rules and regulations regarding prohibited transactions, unrelated business taxable income (UBTI), and other requirements to maintain the tax-advantaged status of your Self-Directed 401(k).

It is highly recommended that you consult with a financial advisor or tax professional who is familiar with Self-Directed 401(k) plans and real estate investing to ensure compliance with all applicable laws and regulations.

My group, the Benjamin Z Miller Investor Networking Group, meets every Sunday on Zoom. I created the group for new and experienced investors to network and make more contacts.

If you would like to learn more about multifamily investing, you should join the Benjamin Z Miller Investor Networking Group.

If that sounds interesting contact my office by going to www.benjaminzmiller.com and fill out the contact form.
You also can register at the link below:

https://www.linkedin.com/events/multifamilyinvestorgroupmeeting7038561468681728000/

or:

https://www.meetup.com/benjamin-z-millers-investor-networking-group/

I hope that helps and good luck with your investing!


Benjamin Z Miller
www.benjaminzmiller.com
1-817-203-4160
[email protected]

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