Epic Real Estate Investing - Money You Didn't Know You Had, and Can Use Today! | 801

Episode Date: October 10, 2019

In this episode, Matt explains how you can use the money inside of your 401K to invest in real estate. Moreover, he reveals how you can get tax deductions when borrowing money from your retirement account! Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terrio Media. Success in real estate has nothing to do with shiny objects. It has everything to do with mastering the basics. The three pillars of real estate investing. Attract, convert, exit. Matt Terrio has been helping real estate investors do just that for more than a decade now. If you want to make money in real estate, keep listening. If you want it faster, visit R-E-I-Aase.com.

Here's Matt. So you have determined now that you are finally ready to start pursuing your goal of financial freedom by investing in cash flowing real estate. Or maybe you've already begun, but you want to kick it up a notch. You want to take it to the next level by buying more property. Well, good. Welcome to the club. Let's make that happen for you.

Now, to buy property, you need money. And that means you have to know where to look for it. Now, when I say you need money, you do, but it doesn't necessarily have to be your money. You just need to have access to it. And there are many places to access money. But one that I would like to focus on today is the money that's inside of your retirement account. And I say that because I often find that people who have no other liquid savings will actually have a fairly decent amount stashed away in a retirement account, especially in an old 401K with an employer. that they no longer work for.

That happens so often for us, the people that we get to interact with, that they've got this 401K that's just kind of sitting out there from this old employer where they used to work. Sometimes they got more than one, and they just kind of don't know what to do with it or don't know how to access it, don't know what they should do with it. They feel like it's locked up forever. It's inside of a retirement account. I guess I've got to wait until I retire. Well, there are a few things that you can do if your money is inside of a retirement

account. It doesn't have to stay there until you get retired. And it really, though, it does all depend on the status of your account. And I'm not going to go through every possible detail and variable. But in general, you may be able to roll over the money into a self-directed IRA retirement account that then purchases the real estate directly or acts as a partner with other funds to purchase the real estate. And this right here, this can be very exciting.

It can be a very exciting strategy and you would definitely want competent legal assistance to do it correctly. But there is a world of possibility out there for this. Now, if you can't roll over your account, maybe because it's a 401k where you still work, you can probably take out a loan against it where you pay yourself back. But you pay yourself back with interest. Now, I'm pretty sure that the interest rate is tax deductible, though you're going to be. going to want to confirm that with your CPA. But how cool is that? The interest rate is tax deductible. I mean, you borrow from yourself to purchase a cash flowing asset, then you pay yourself back with

interest that's tax deductible. And by the way, here's the other amazing thing that people often fail to realize. It's not you paying back your account. No, it's your income property paying it back for you. Talk about an incredible use of... of your investment dollar, your retirement dollar. Finally, you might be able to just forget a loan and forget a rollover altogether and just plain old withdraw some or all of the funds. And to be honest, this is often a place where I totally lose people. And sometimes it inspires actual rage within people.

Just head on over to the YouTube channel and you can see all the enraged people that feel the need to comment when they hear something like this. If this happens to be you, remember, all we're doing is exploring your options here. We're just taking a look at the possibilities. No one is forcing you to do anything, and I'm not even recommending it because I can't. I don't know your specific situation. There's no solution that's a one-size-fits-all. So I'm just going to request that you and your mind just kind of open.

open up here and follow me down this path a bit as we consider this option. As I'm sure you are immediately thinking, what about the early withdrawal penalties and the taxes, right? Because that is a reality. If you take your money out of your retirement account prematurely, there will be a withdrawal penalty and there will be some tax implications. That is all true. But here's why it still may be a good idea for the right person, even with the right. the penalties and the taxes, because it really all comes down to the rate of return that you are getting now versus the rate of return you could be expecting from cash flowing real estate.

You see, many times even withdraw penalties and taxes have, you know, they've got, how should I put this? They've got much more of a psychological power over people than a mathematical power. And politically correct advisors, financial advisors, are all too glad to just. avoid this topic altogether by just letting you glide down the path that you're already on. But if we can get your money performing much better and or safer somewhere else, you know, recouping the costs of those taxes and the penalties that come with that transition, that may happen very quickly. In most cases, it does. Then the money is invested much better forever more. You see, to make your investments grow, your job is to see to it that there's more money

coming in than is going out. If you got more money coming in than is going out, your situation, the portfolio, your investments are going to continue to grow. It's just math. It's pluses and it's minuses. And all you want to be focused on is I want more pluses than I got minuses. And the reason people get stuck at the thought of liquidating their retirement accounts is that the minuses have big, ugly labels attached to them, labels like taxes, labels like penalties. But at the end of the day, they're just minuses. That's all they are. And if you can afford a couple of minuses in your portfolio in exchange for a bunch of pluses, pluses that would actually accrue indefinitely, would you do it? You know, not every strategy is going to be right for everybody.

You certainly want to do your own due diligence. But simplifying investing into pluses and minuses. That's a great and strong way to start. You'll likely never know what is possible until you do the math on your own situation and then make an educated decision on what's best for you. So if you've been stuck on your road to real estate investing, just take the time, take the time right now. and just run the numbers.

Reach out to your broker, reach out to your CPA, reach out to your 401k facilitator, just kind of have the conversation. Go online and get your latest 401k statement and see what you're really working with. And at the end of the day, all it is that I want for you is to,

I just want to help you get moving. I want to help you get started. So, or restarted even. Let's get moving today so you can start investing for tomorrow. Literally tomorrow. I'm not talking about figuratively somewhere, years for now. No, this can all happen in a moment. You just have to take the action.

All righty. That's it for now. God bless and to your success, I'm Matt Terrio, living the dream. Yeah, yeah, we got the cash flow. Yeah, yeah, we got the cash flow. You didn't know, home world, we got the cash flow. This podcast is a part of the C-suite radio network. For more top business podcasts, visit c-sweetradio.com.