A physician who racked up 7-figures of student debt explains how she started buying investment properties with her 401(k) funds

• After medical school, Dr. Jill Green found herself with about $1 million in student loan debt.
• Since investing in real estate, she said her net worth has gone from 'negative $1 million' to $3 million.
• She bought her first property by borrowing from her 401(k) and has added one property a year.

By the time Dr. Jill Green finished medical school, she'd racked up seven figures in student debt and had virtually zero assets.

"My net worth was negative $1 million," the family practice and emergency medicine doctor told Business Insider. "Our primary home was our only asset."

Green, who began her career in investment banking before pivoting to medicine, began entertaining the idea of property investing after hearing a physician couple speak at a virtual entrepreneur event for doctors. The couple, Kenji and Leti Asakura, used real estate investing to create an additional revenue stream, allowing them to scale back at work and spend half the year traveling.

She decided to enroll in their course, designed to help physicians build rental portfolios and reduce taxes.

It was a decent chunk of upfront money, about $2,500, for someone with a negative net worth, but Green viewed it as a smart investment for her and her husband.

"I was like, if we even get $10,000 back in our taxes next year, the course will have paid for itself four times. It seemed like a no-brainer, and he agreed," she said. "So, I took the course, and our tax return that next year, after implementing what they taught, was $40,000. I was able to take that money and use it to buy another investment."

Borrowing from her 401(k) to buy her first property

When Green decided she wanted to invest in property, the main barrier was coming up with funds for the down payment: "We didn't have $200,000 sitting in a savings account."

She and her husband did have some money in their 401(k) accounts, but they figured it was off-limits.

"I had heard of people taking money out of their 401(k) as loans before, and my thought was, 'Those people are irresponsible. You don't touch your retirement account,'" said Green.

Indeed, retirement-specific accounts like 401(k)s and IRAs come with early withdrawal penalties, intended to discourage investors from dipping into their retirement funds. However, as she learned in the real estate course, she could borrow (not withdraw) from her account.

"It's essentially taking a loan from yourself, and you're paying the interest back to yourself," Green explained. "Your retirement account doesn't get touched, and there are no tax implications."

She and her husband ended up taking a loan from their 401(k) to help fund the purchase of their first investment property, a medical office building.

Using an SBA loan and buying in a low-interest rate environment helped keep their costs low, she added: "The down payment requirement was quite small, and the interest rate was incredible." She said they locked in a 4% rate.

Borrowing from her 401(k) posed a greater mental barrier. She had to convince herself that "I'm not a reckless idiot. This is going to be OK to try something that I considered audacious like that," she said, adding that people still question her when they find out she used retirement money to fund real estate purchases. "I've used that strategy more than once, and I've now become quite comfortable with it, but when I talked to other physicians about it, they're like, 'Do I need to write you a check for something? Are you doing OK?'"

As for the actual process, she said it was simple and kick-started their rental portfolio, which they've gradually scaled, adding one rental property per year.

They selected a five-year repayment plan, which translated to about $200 per paycheck.

"It wasn't anything that we felt as a family," said Green. "They just take it out of your paycheck. You're essentially paying yourself back every month. It was very easy."

'Most people have access to some capital'

Green said she doesn't believe real estate is as out of reach as many people think it is, particularly professionals with access to retirement accounts: "Most people have a 401(k) because we've all been told to save for that, so most people have access to some capital that they can borrow from."

And, it can be a potentially life-changing investment.

She said she's now debt-free, and her net worth has swung by about $4 million since 2019: "I've been able to go to $3 million positive net worth. I don't think that there's a way to have that kind of power to amplify and literally change the position that you're in, from financial insecurity to financial security."

The most difficult part is taking the first step, especially if you're starting from a scarcity mindset like Green was. Her advice is to start small: Watch YouTube videos or listen to podcasts about real estate, sign up for a course, or browse the Zillow listings in your area.

"Just start somewhere," she said. "The difference between 0 and 1 is infinite — they call that the infinite 1%, to go from 0% to 1% of doing something. So, if you can just start somewhere, it literally doesn't even matter where, then you're already infinitely farther ahead than someone who never starts at all."