I suppose passing along those funds to grand-kids might be another option.Since Ann asked about borrowing against a 529, if there was a financial/legal instrument that would guarantee that the funds would be designated somewhere else, I could see a market for these types of securities developing. 

First, though, I would make sure you understand the legality of your situation as the landlord with tenants living in a property that may be deemed unsuitable.

@Kalib WilliamsYes, but no.Any debt instrument under the umbrella of a 401(k) must be non-recourse - meaning no personal guarantee from you or a disqualified party to the 401(k).While the 401(k) could probably obtain a non-recourse mortgage and pull cash liquidity that could be used to make other investments, this would not likely be a line of credit. 

Generally, the residential mortgage agreement will contain a paragraph like this: "Borrower shall occupy, establish, and use the Property as Borrower’s principal residence within X days after the execution of this Security Instrument and shall continue to occupy the Property as Borrower’s principal residence for at least one year after the date of occupancy, unless Lender otherwise agrees in writing, which consent shall not be unreasonably withheld, or unless extenuating circumstances exist which are beyond Borrower’s control."

I would be 100% owner of the LLC but seeing as the property is still not in the LLC's name, I am not certain that I am entitled to claiming the house as an instrument of the business, also any protections from the LLC dealing with seperation of the properties seems to be void in this case.

(d) The affidavits required by Subsection (c) may be filed separately or combined into a single instrument.

3)  I assume that as long as I roll the investment returns into another property flip, the taxes can be avoided.Thank you.You do not want to invest with anyone (friends or otherwise) that do not use contracts for every stage of the process with you or any party involved in then transactions.If you are a single asset lender You need to think like a bank here, make sure you receive some sort of security instrument like a note and deed of trust with personal guarantee from the borrower.

Some HELOC instruments cannot be used to make certain investments into stock for example. 

Series LLC are only considered an instrument in 18 states & territories but depending on where you live & where the properties are located, you can incorporate in another state which is why Texas, Nevada & Wyoming are popular states for LLC creation for real estate investors. 

Financial planners are not getting commissions on Real Estate and the funds you invest in REI subtract from the amount they can potentially earn from selling you financial instruments.