QUESTION: For the non-recourse loan let me set-up an example. For a house that sells for 80 K, we use the solo 401k to purchase the house for "cash" Later, after the house is cash flowing, we would like to get the some cash back into the 401 k. Would it then be possible to get a non-recourse load on a house that the 401 k already owns?
ANSWER: This is an excellent question and one that we are receiving more often. No. Reason being, the non-recourse loan proceeds must be applied towards the purchase of the property not used to improve the already solo 401k owned property. Also, non-recourse loan funds may not be used to improve existing solo 401k owned real estate.
Solo 401k Real-Estate Purchase Procedure
Solo 401k Contributions