Experienced investors - I need your help~!

[Mary March]

Thanks for reading! My dilemma is whether it makes sense to use a self-directed IRA (check book control) for the following deal:

Purchase price $117,000

My current IRA (not yet rolled into a self directed account) if $30,000. I want to use this money for the down payment and finance the rest.

I thought this was a good idea at first, but I just read about how I would incur extra taxes on the financed part of the loan at an Estate Tax rate? Is that right? Does the loan need to be in the name of the IRA LLC? How does this all work?

Will the fees end up equaling the penalty if I just cash out my 401K and buy it directly? 

I am so confused - any help is appreciated.

Thanks,

Mary