So, if the IRA were to invest in real estate, there would be a solid asset held as the principal of the account, and that asset can spin off positive cash flow. 

If I cash out about $40k, I'll save about $187 monthly that I can pay down the principal or keep stacking for future needs. 

Agents that that understand investing and basic principals like cash flow and appreciation are an enormous value add Vs the agent who is showing you a house because it has a “pretty” kitchen.

Depending on the funds being held it can generate a few hundred dollars in passive income reinvested in to the principal.

Not the best, but better than each being an agent and principal for the other under a GP.The overwhelming majority of people use the LLC to hold property.

So the question is what are the flaws in the following deal for the owner of a principal residence and the real estate investor?

Is there some easy way to self calculate interest vs principal payments?

For your mortgage you will have to journal out the principal, interest, insuarance, and taxes on quickbooks.

The original principal balance was 201k. which means even if she never paid any of it there is at least 100k worth of equity.

It’s still possible to pay down the house early by making extra principal payments.