Properties in SDIRA, good or bad?

[Costin I.]

Often a Self Directed IRA (SDIRA) is presented as a better retirement and/or investing vehicle, especially for its ability to invest in real estate. This is actually one of the main points in the sale speech of many SDIRA custodians and administrators. However, a few tax advisers (some famous, like Gary Sutton) consider purchasing real estate properties (a tax advantaged asset) within a SDIRA (a tax advantaged account) a bad proposition, on the idea the two of them nullify each other and lose the tax advantages (like depreciation).

Therefore, I'm looking for people with experience with SDIRA's and using them for real estate investing - is it a good strategy or not? Should you get rental properties with your SDIRA? With or without leverage, through non-recourse loans and the potential UBIT? Should we look into notes only, and stay away from properties in SDIRA? Does it make a difference if investing with a IRA SDIRA or a ROTH-IRA SDIRA?

Note: I'm primarily a buy&hold investor, primarily interested in the cash flow and passive income (and tax advantages) rental properties provide and not so much in the appreciation promise, with a very long outlook (current exit strategy is to pass them to our heirs).