Another question about Solo 401K funds.

[Michael Martin]

Hello all! I'm new to the forums and to the idea of real estate investing. I've been doing some research lately on the process of flipping houses and I'm intrigued by it all. I've also learned about using a Solo 401K to fund these purchases and I have a couple of questions about how that works.

My situation is this: I'm retired and have my nest-egg in a traditional IRA. I have an ecommerce retail business, set up under an LLC, that's been operating now for a couple of years plus. It's not successful monetarily, but it's given me some tax deductions. My living expenses are covered by pension, Social Security and IRA withdrawals.

Question #1: Can I use this existing business as my self-employment qualifier for setting up the Solo 401K?

Question #2: If I use funds from my Solo 401K (transferred from IRA) to purchase property that needs to be rehabbed and then flipped, can I also use those funds for the fixed expenses (closings, mortgage payments, etc.) and the rehab costs? If so, are those disbursements tax-deferred provided they are reimbursed to the 401K? Thanks.