The most prominent question that comes into your mind while choosing a retirement plan is “how much is enough.” George Foreman said, “The question isn’t at what age I want to retire, it’s at what income.” There isn’t any definitive figure that can help you survive through retirement and the best strategy is to build a fund that never ends.

For self-employed professionals and small business owners, investing in real estate with a Solo 401k retirement plan could be the answer. Real estate has always been a safe investment option with minimal management requirements. Solo 401k has gained popularity because of its freedom to invest in real estate and similar investment opportunities. For real estate professionals, investing in real estate is the safest investment choice and Solo 401k retirement plan facilitates it.


The investment landscape of Solo 401k investment plan is not only limited to real estate. One can invest in precious metals, private businesses, tax liens, tax deeds and hard money lending. It is important that every investment made with Solo 401k funds should be withdrawn from the Solo 401k account only. At the same time, the capital gains or interest from any such investments should return to the account only.

How to invest in real estate with Solo 401k?

  • Understand the eligible property clause: Before you plan to purchase a commercial or residential property, make sure that the property satisfies the legal regulations. First, neither the investor nor any other disqualified person should be the owner of the property. At the same time, the Solo 401k account owner should not use the property for primary residence or office space, or for any other personal use.
  • Open Solo 401k account: Choose a Solo 401k retirement service provider and transfer funds from your existing retirement account into the Solo 401k plan. Keep in mind that any purchase made would be under the name of the Solo 401k account.
  • Use non-recourse loan for funding: Real estate transactions require large investments and if you do not have sufficient funds; you can use a nonrecourse loan for funding. A nonrecourse loan does not require personal guarantee and it considers the property as collateral.

Once you have the loan, make sure to consult qualified attorneys for the transaction and follow all the rules. The key to achieve success with real estate investments is to comply with regulations and avoid any tax penalties in the process. 

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