SDIRA vs. SD401k for an employed person

[Stan Hill]

I did a search and didn't see this specific situation covered. I am hoping to find some insight on this.

We currently have a SDIRA. It has worked out well. However, there are a few limitations that have led me to researching other options. We cannot personally benefit with things like gas and being paid for time and other limitations. Most of you are probably familiar with what I am talking about. There's a specific term I've heard, just can't remember it right now. Also, it has been difficult to tap the equity in the 3 properties we currently own. It turns out most of it is due to being held in an LLC, though minimum loan amount has also been an issue (total value of properties is around $160k).

So I came across the idea of a self-directed 401k. The mechanics of it is we roll over 401k funds from a work 401k and start a personally-directed 401k. That 401K then invests in shares of a new C Corp. A few basic rules: there has to be at least one half-time employee. It needs to an active business. So with regards to real estate, I would need to be flipping and/or managing an 8-plex or somehow reasonably justifying 20 hours per week. 

Here is the point I really want feedback on. I have been told that a C Corp can leverage paid for properties much easier than an LLC, and that it is in fact a common practice.

As my intention is to be a full-time investor by the end of 2015, it appears clear to me that leveraging our acquisitions will be absolutely critical.

I am not very knowledgeable on business structuring. Our LLC is pretty basic, with just 3 rentals and very low maintenance. I keep the rules simple in my mind so I don't have to do a lot of thinking about and worrying about rules.

We are in the process of doing our first flip right now and my intention is to replace my income (it's pretty low due to an unwanted career change) in 2015.

Also, the cost I have been quoted is $5,500. That's a lot more than our SDIRA- 2.5 times more.

Any insight would be greatly appreciated.