I read in the local newspaper that you could invest your 401K into buying real estate property and that it steal would be considered a 401K investment and not taxable until redeemed?

No, you can not take your 401K money out of the plan and buy real estate. Your 401K company that handles your investment can invest money into real estate, many do. But they will normally take money from 1000's of investors and purchase large investments, or they may buy mortages and the such as part of their overall investment plan.

But no you can not just take your money out. I will assume this newspaper was from some investment group that wanted you to give them your money and they would invest it for you.