Self Directed IRA vs. Solo 401k vs. Cash Out vs. Leave it alone?

[Joshua Hilliard]

PLEASE HELP!!!

I have a Roth IRA that has underperformed for years and I'm ready to be done with it. It did great in the last year so I'm looking to move it into something more productive. I heard a podcast on investing with a self directed IRA but the more I looked into it, it looked incredibly restrictive. I'm already retired military and have a pension and medical so I'm not overly worried about my real retirement and the Roth was mostly an afterthought. Now I want to increase my passive cashflow and want to do it through real estate. Bottom line is I want to use the funds in the IRA for a down payment on a multifamily in New Jersey where I'm moving next summer.

When I have mentioned this to investors they told me to stay away from Self Directed IRAs. I was told that solo 401ks are better. I'm a W2 wage earner currently so it's my understanding that I can't use a solo 401k right now. Because both of those are not good options then I could liquidate and pay the penalty or I could just leave it alone and come up with another strategy. All my wife and my free cash is going to pay off some home repairs on our current house to make it rentable when we leave so saving is not an option at this time. 

I really want to cash out but I'm looking for any sane and logical reasons why I shouldn't. Thank you.

Josh