Originally posted by @Susan K.

@Ruel K.

@Daniel ShowmanReal estate is a very popular alternative investment holding in both IRAs and solo 401(k) plans. 

K.

If so do you k ow if all back taxes have to be paid or just the taxes they have listed?

I would only recommend this strategy to capitalize a business with more than $100K of retirement funds.The operating business must be a C CorpThe corporation sponsors a 401k retirement planYou can rollover funds from an existing tax-deferred IRA or 401k into the new 401kThe 401(k) then uses an Employee Stock Option Purchase to purchase shares of the parent C corporation.  

@Ryan K.

I am looking at getting an FHA or VA loan to fund the property with the low to no money down financing (since most lower end homes will be 300+K, so that means 60+k down payment).

@Jimmy Ready as @George Blower mentioned, you can take advantage of both a Self-Directed IRA and your work 401(k). 

Results will vary by loan type and lender.An alternative that may resolve your dilemma is the use of a SD401(K), which allows far greater tax deductions than a SEP and allow you multiple routes to use the funds for real estate investment.