@Chris CapersFollowing are the similarities and differences between the solo 401k and the self-directed IRA.The Self-Directed IRA and Solo 401k SimilaritiesBoth were created by congress for individuals to save for retirement;Both may be invested in alternative investments such as real estate, precious metals tax liens, promissory notes, private company shares, and stocks and mutual funds, to name a few;Both allow for Roth contributions;Both are subject to prohibited transaction rules;Both are subject to federal taxes at time of distribution;Both allow for checkbook control for placing alternative investments;Both may be invested in annuities;Both are protected from creditors;Both allow for nondeductible contributions; andBoth are prohibited from investing in assets listed under I.R.C. 408(m)The Self-Directed IRA and Solo 401k DifferencesIn order to open a solo 401k, self-employment, whether on a part-time or full-time basis, is required;To open a self-directed IRA, self-employment income is not required;In order to gain IRA checkbook control over the self-directed IRA funds, a limited liability company (IRA LLC) must be utilized;The solo 401k allows for checkbook control from the onset;The solo 401k allows for personal loan known as a solo 401k loan;It is prohibited to borrow from your IRA;The Solo 401k may be invested in life insurance;The self-directed IRA may not be invested in life insurance;The solo 401k allow for high contribution amounts (for 2017, the solo 401k contribution limit is $54,000, whereas the self-directed IRA contribution limit is $5,500);The solo 401k business owner can serve as trustee of the solo 401k;The self-directed IRA participant/owner may not serve as trustee or custodian of her IRA; instead, a trust company or bank institution is required;When distributions commence from the solo 401k a mandatory 20% of federal taxes must be withheld from each distribution and submitted electronically to the IRS by the 15th of the month following the date of each distribution;Rollovers and/or transfers from IRAs or qualified plans (e.g., former employer 401k) to a solo 401k are not reported on Form 5498, but rather on Form 5500-EZ, but only if the air market value of the solo 401k exceeds $250K as of the end of the plan year (generally 12/31);When funds are rolled over or transferred from an IRA or 401k to a self-directed IRA, the amount deposited into the self-directed IRA is reported on Form 5498 by the receiving self-directed IRA custodian by May of the year following the rollover/transfer.Rollovers (provided the 60 day rollover window is satisfied) from an IRA to a Solo 401k or self-directed IRA are reported on lines 15a and 15b of Form 1040;Pre-tax IRA contributions on reported on line 32 of Form 1040;Pre-tax solo 401k contributions are reported on line 28 of Form 1040;Roth solo 401k funds are subject to RMDs;A Roth 401k may be transferred to a Roth IRA (Note that from a planning perspective, it may be advantageous to transfer Roth Solo 401k funds to a Roth IRA before turning age 70 ½ in order to escape the Roth RMD requirement applicable to Roth 401k contributions including Roth Solo 401k contributions and earnings.)

The following IRS page discusses rollovers in more detail. https://www.irs.gov/retirement-plans/plan-participant-employee/rollovers-of-retirement-plan-and-ira-distributions

We go back and forth for 3 weeks and get an agreed offer - I get paperworked to death and finally get a prelim approval for an SBA loan utilizing a ROBS (roll over business startup) to fund the down payment needed. 

@Austin FrenchTo take money out of a 401k will create a tax liability and reduce the amount of cash available to invest significantly.The better option would be to rollover a portion of that 401k to either a self-directed IRA or 401(k) as most appropriate for your father's situation.  

Of course you have to have the $50,000 or whatever the minimum is for syndication in your account, maybe from a rollover from previous employer or just buildup from previous investments in those types of accounts.

Since my funds are in a tax deferred IRA, I believe transferring my cash to a Solo 401k is my best option and  I understand that I could rollover my real estate income generated in the Solo 401k to a Roth conversion with the understanding the five year hold clock would start at the time of deposit to the Roth account.  

I can use this to likewise rollover at a 7% pref or use it to upgrade my house etc..

I do know that I will have to pay tax on the rollover.

If so, buy a fixer of two and make them beautiful and wait for appreciation to roll over you.If you can do this in an area close to downtown maybe, then you could consider STRs as well.....

Haven't done one of these personally, but there may be a requirement for it to roll over calendar years?