What are the tax consequences for early withdrawal of a 401k that has less than you have contributed? I have contributed 45k and is now worth 37k. I feel I better invest the money in real estate at this point and deal with the tax issue when it comes due, but not sure if I have the ability to lessen the tax liability because it is underperforming.

Since all your contributions are PRETAX there is no loss. Whatever you pull out is added to your taxable income. Plus the 10% penalty.

Doesn't your plan offer different investment options?