Why Multifamily Real Estate Investment is a Great Way to Make Your TSP Funds Work For You

by | Mar 1, 2023 | Investment, Multifamily, Retirement

In today’s economic environment, relying on traditional pathways to retirement is becoming more obsolete.

As a dedicated service member, you have sacrificed time away from home and family to better our nation’s future. Solidifying your own future – so that you can retire with more wealth and financial freedom – should be an easy process that allows you to build your ideal future and legacy, even while you are stationed abroad. 

In this article, we will discuss how you can start letting your TSP funds work for you right now as a passive investor in multifamily real estate syndications


You Don’t Have to Wait Until Retirement to Get the Most Out of Your TSP Funds

Similar to a 401 (k), the Thrift Savings Plan is available to you as a foreign service member. While this retirement savings plan is a great way to start building a nest egg for retirement, there are more prudent ways to use these funds to help maximize your returns.

While you may feel stuck in an institutionalized pattern of service – one where you will constantly need to work for a healthy retirement – there are realistic ways to leverage your contributions and make passive income prior to retirement. 

Real estate is one of the most stable ways to generate income from investments. However, investing in real estate may seem out of reach when you are spending time stationed abroad. Multifamily real estate syndications allow you to invest from anywhere knowing there is a team of real estate experts to tackle the logistics for you. 

But, how can you use your TSP funds to do this?


Can You Use Your TSP to Fund Real Estate Investment Property? 

The short answer is not directly. However, while still employed, you are able to transfer some of your TSP funds to an IRA or Solo 401k which can be used for real estate investment. 

The TSP can be invested in real estate, but only under certain conditions. The only option is to use the funds for a residential loan, which means investing in a property that one is living in as a primary residence. This option doesn’t allow for passive investing in multi family real estate. 

However, if you are still employed, you may be able to transfer some of the TSP funds to an IRA or solo 401k, both of which allow for investing in real estate. If you are retired, you can transfer the entire TSP balance. Borrowing against your TSP contributions can be an easy way to establish a down payment and closing costs for your investment property. 

The loan is limited to the funds that you have contributed to your TSP account, and any accrued earnings. The loan amount must be between $1,000 and $50,000, and you will be charged a $50 processing fee. The interest from a TSP loan gets paid to you, and payments can be taken directly out of your paycheck. When you repay your loan, the repayment amount gets deposited back into your TSP account and is invested according to your most recent contribution allocation.

Keep in mind, it is crucial to speak with a financial counselor before taking out a TSP loan to ensure that you are not sacrificing your long-term retirement goals. If you want to talk to someone who has been in your shoes, and used TSP funds to catapult his real estate investment legacy, schedule a free coaching call with Passport Rei’s James May.


Why Is Multifamily the Ideal Place to Invest Your TSP Funds? 

Multifamily real estate syndications are a sound option during high inflation for a number of reasons. But the largest contributing factor to its resiliency is that it is a need based asset. Regardless of the health of the economy, there is always a need for housing, and multifamily is an increasingly popular option for Millennials and Gen Zers seeking affordability and amenities.

Another aspect of multifamily real estate syndications that may be attractive to service members is that they allow you to act as a passive investor. This means you don’t have to do any of the leg work involved in getting the project up and going, but you still get to share in the financial benefits. For active foreign service personnel, this gives you more freedom to build your financial portfolio, even when you are abroad. 

With our combined 52 years of service, we know how challenging it is to navigate ins and outs of investing from afar. That is why Passport REI uses our combined knowledge in profit-generating real estate investments to empower you in taking the steps to create a lasting legacy for your family through multifamily real estate opportunities.


Key Takeaways

  • You don’t have to rely on your TSP funds alone to carry you through retirement.
  • You can rollover your TSP funds into an IRA or Solo 401k which can be used for real estate investment. 
  •  Multifamily is a solid investment option during high inflation.
  • Acting as a passive investor in a multifamily syndication allows you the flexibility and freedom to grow your wealth when you are abroad.
  • Creating your ideal future and legacy starts with making informed investments. 


Are you ready to let your TSP funds start working for you?

It is our mission to help foreign service employees, like you, build a legacy and financial future that reflects the painstaking work you have put in. Our experience in foreign service, coupled with our knowledge in real estate investment, has provided us with the unique perspective to help you build wealth and security, even while stationed abroad. 

Schedule a call today with our team and get started on the path to financial freedom. We love hearing from you and answering all of your questions.