Investment House for Parents

[Marty N.]

Hello everyone, I have a friend who is looking to move his parents closer so he can take care of them more as they age. His personal residence sits on a large enough lot, that he wants to build them a small residence on the back of his property, and they will rent from him. He has funds in an IRA that he can turn into a self directed IRA. Can he then use funds from that for this project as a real estate investment so as not to incur interest or penalties? If not, is there another way? Thanks.