Individual 401k | Solo 401k | Pooling Retirement Funds for Real Estate Investment

Question regarding Individual 401k/Solo 401k Real Estate Investment Rules 

My wife & I are freelance graphic designers in Phoenix, Arizona & seeking to open a Solo 401k.  Our goal with the 401k is to buy real estate rental properties.  I understand that my wife and I would each have separate accounts under our Solo 401k plan.  Can we still pool the funds for the purchase of a single property in the name of the single 401k trust?

Answer regarding Individual 401k/Solo 401k Real Estate Investment Rules 

Yes – you can pool funds from both the 401k account for your benefit as well as the 401k account for your wife’s benefit.  Please note that the funds to purchase the real estate should come from both accounts (e.g. two wire transfers to the title or escrow company).  The property would be titled in the name of the Solo 401k.  Going forward, the ongoing income and expenses can be received & paid through one account for administrative convenience.  Please note that the income and expenses related to the investments need to be  401k sub-accounts need be reconciled between the two Solo 401k sub-accounts (in accordance with the same ratio of the funds initially used for the purchase) on at least on an annual basis and certainly before any distributions are taken.

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About George Blower

I have the privilege of educating our clients about our products and services so that they can make informed and confident decisions about their financial future. Prior to joining My Solo 401k Financial, I served as the general counsel for a subsidiary of a Fortune 500 financial services company. Learn more about George Blower and My Solo 401k Financial >>


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