My loan officer just came back to me apologizing for the oversight and informed me that the CD will reflect the right amount for cash to close.

I do NOT have enough knowledge or experience in this arena to provide specific “how to” accomplish this, or even to provide specific”proof” of my position.  

@Hector Lewis - The decision ultimately depends on your current cash reserves relative to your financial needs, as well as your willingness to reinvest for potential appreciation.

If your a cash basis taxpayer you can’t take the loss until realized.  

I'm terrified of doing all this research, finding a "dream" property, only for it to fail and negative cash flow. 

So either you pay for the repair out of the idle cash in your account, file an insurance claim and use those funds, or rollover/transfer funds from another retirement account to cover the cost. 

As a side note typically I do not use my deferred tax dollars to invest in traditional real estate as the benefits (depreciation etc) are all lost when using a self directed IRA - My guess is build to rent will provide little to no cash flow to build the account - it will all be locked in the property. 

You can make straight Roth contributions or convert cash as you’re talking about but you can also convert assets from pre-tax to Roth.

Talk to your insurance provider about your concerns and they can recommend the right coverage.

Saul, Phoenix and Vegas are popular markets, but I’m not sure they’ll actually cash flow well with today’s prices and interest rates.