Investments

A Solo 401k immediately broadens investing possibilities by permitting investing in any asset that is not disallowed under the IRS regulations. Here are some of the many investment possibilities available with a Self-Directed Solo 401k.​

Real Estate

  • Residential Property
  • Commercial Property
  • Developed Land
  • Foreclosures
  • Rehabs/Flips
  • Mobile Homes
  • REITs

Promissory Notes

  • Mortgages/Deeds of Trust
  • Secured notes
  • Unsecured notes
  • Car Paper
  • Commercial Paper

Tax Liens/Tax Deeds

  • Tax Lien
  • Tax Deed

Others

  • Structured Settlements
  • Factoring
  • Accounts Receivable
  • Foreign Currency Exchange
  • Equipment Leasing
  • Businesses
  • Private Equity
  • Precious Metals
  • Crowd Funding
  • Bitcoin

Click here to learn about the steps and procedures for buying real estate with your self-directed 401k.

Click here to learn about the steps and procedures for buying promissory notes with your self-directed 401k.

Click here to learn about the steps and procedures for investing in private company with your self-directed 401k.

With Whom Can You Make Solo 401k Investments?


Who’s Out

  • You
  • Your Spouse
  • Your natural parents and/or your adoptive parents
  • Your natural grandparents
  • Your natural children and/or your adopted children
  • The spouses of your natural children
  • Any fiduciary of your Solo 401k
  • Any people providing services to your Solo 401k–such as your stockbroker–as well as his employees and both his and his  employees’ blood relatives
  • Your Solo 401k trust document provider or administrator

Who’s In

  • Your brothers and sisters
  • Your Spouse’s brothers and sisters
  • Your spouse’s parents
  • Your spouse’s grandparents
  • Your stepchildren
  • Your spouse’s stepchildren
  • Your grandparent’s spouse, if not your natural grandparent
  • Your aunts, uncles, and cousins

Click here to learn more about prohibited transactions and sample illustrations.

Bitcoin Investment QUESTION:

I have moved funds into the solo 401k bank account. I am considering investing some funds into Bitcoin. Wanted to get you thoughts on it and ask if my plan allows for it?

ANSWER:

Yes our solo 401k plan allows for investing in alternative investments such as bitcoin.

We have clients that have established individual accounts at Coinbase and then linked the account to their Solo 401k bank account. Please keep in mind that (i) no non-retirement funds should be deposited into the account; and (ii) if both business partners or spouses are participating in the solo 401k plan, both business partners or spouses need to keep their funds in separate accounts.

Promissory Note QUESTION:

I have a few questions about using my Solo 401k account.
I took a personal loan for 50% of the balance, which is getting paid back monthly.
Now I am looking into using some of the money to invest in a real estate project, either as a JV partner, or as a hard-money lender.  What restrictions, if any, do I have on using that money?  Is there a limit on how much I can use?

ANSWER:

There are no limit restrictions for how much of your solo 401k funds you can invest. You could potentially invest 100% of it if you desire. Restrictions (who you can lend the solo 401k funds) will be covered under the prohibited transaction rules. Please see important information on our links below. 
 

Investment Fund QUESTION:

I am looking at moving funds from my solo 401k 401k checking account in to a investment fund and wondering if there is anything I have to do to document it to make sure I am in compliance.

ANSWER:

Yes the solo 4o1k investment rules allow for investing in private companies. This appears to be an equity investment in a private company that has been registered with the SEC. We have created a sample procedure that lists the typical investment documents associated with this type of investment- Click here to view.

Bust Investment QUESTION:

If the solo 401k investment goes bust, how do I record the write off?

ANSWER:

There is no “write off” as this investment is done via a Solo 401k where the gains are tax-deferred.

Domain Names QUESTION:

Can the Solo 401k invest in domain names and resell them with proceeds back into the account?

ANSWER:

We are not aware of any specific prohibition on purchasing a domain name via a Solo 401k.  As such, this is acceptable provided that (i) the domain name is purchased from an unrelated person; (ii) the title is issued in the name of the Solo 401k (e.g. your name as trustee of Solo 401k) – which you should confirm that this is possible; and (iii) the domain name is not operating as an active business.

REITs Investment QUESTION:

I have found a few REITs that allow for non-accredited investors to invest into the fund. They say they must issue a 1099-DIV. This is still ok?

ANSWER:

Yes provided that it is issued to the Solo 401k and under the EIN for the Solo 401k so it does not trigger any taxes.

Making Investment QUESTION:

When I want to make an investment, do I need to run this by you, and are there documents required for said solo 401k investments from your end?

ANSWER:

No.  You don’t have to submit the investments for our approval.  At the same time, we are here if you have questions. You may also use the investment forms located HERE to help document the investments but the forms are for your records only.

Making Investment QUESTION:

Say I want to purchase an investment home to flip, and I have enough funds for down payment. Is the 401k account permitted to receiving a loan to complete the acquisition? Usually an individual has to guarantee the loan, which would be me personally. How does this work under this scenario? Or must the account have sufficient funds for a cash deal only?

ANSWER:

The Solo 401k can finance the purchase of the real estate provided that the financing is non-recourse (i.e. neither you nor the 401k can guarantee the loan).

  • Non-recourse financing: Find lenders that specialize in non-recourse loans to solo 401k plans: CLICK HERE
This information is for informational purposes. For information specific to your investment situation, MySolo401k.net recommends consulting with a qualified tax advisor, CPA, financial planner or investment manager. MySolo401k.net is 401k provider; therefore, it does not offer investment or tax advice, nor sell investments.

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