California Investor Taps $15,000 Savings And 401(k) Loan To Buy $60,000 Detroit Rental

Facing high home prices in California, Lucy Zheng turned to the Midwest for her first rental property, eventually buying in Detroit, where she found homes selling for about $60,000, according to Business Insider.

Zheng put in roughly $15,000 of her own money and borrowed the remainder from her 401(k), allowing her to purchase the property in cash rather than take out a traditional mortgage.

Business Insider interviewed four investors who used assets they already had, including home equity and a paid-off truck alongside Zheng's retirement account, to fund their first deals instead of saving the 20% cash down payment lenders typically require. On a median-priced $400,000 US home, that standard down payment would mean coming up with roughly $80,000 before closing costs and reserves.