Borrowing from Your 401k for a Rental Property

In this episode, Lucas and Luna explore the strategy of using a 401k loan to fund a rental property purchase. They walk through a real-world example: a listener named Sarah who borrowed $35,000 from her 401k at 4.5% interest to buy a duplex in Cleveland. Lucas explains the mechanics — how the loan works, the 5-year repayment rule, the risk of losing your job and triggering a tax bomb, and why the interest you pay goes back into your own account, not a bank's. Luna challenges the conventional wisdom that borrowing from retirement is always a bad idea, pointing out the opportunity cost of waiting years to save up a down payment. They compare the 401k loan to other funding sources like HELOCs and private money, and discuss when the math actually works — specifically for investors who have stable W-2 income and a high conviction deal. The episode also covers the double-taxation critique and why some financial advisors still hate the strategy. By the end, listeners get a clear framework for deciding if a 401k loan fits their own real estate investing timeline. #401kLoan #RetirementBorrowing #RentalProperty #RealEstateInvesting #ClevelandDuplex #DownPaymentStrategy #SelfDirectedInvesting #OpportunityCost #TaxBombRisk #StableIncome #W2Investor #BRRRRMethod #HELOC #PrivateMoney #FexingoBusiness #BusinessPodcast #Finance #RealEstate Keep every episode free: buymeacoffee.com/fexingo