@Brad Kanouse Using Traditional IRA funds for an investment property typically incurs income tax and a 10% penalty if you’re under 59½, as investment properties don’t qualify for tax exemptions.

Phoenix contains a rare combination of elements that have created an outstanding market for distressed property investments, including the following:Cost Savings: Distressed properties are sold below their market value and enable investors to take hold of properties at a trifle compared to traditionally listed properties.Strong Market Fundamentals: Being among the fastest-growing cities in the country, Phoenix ensures a high demand in housing and rentals, hence good potential for resale or income from rentals.Value Creation Opportunities: Most distressed properties need renovations; thus, such situations present opportunities for investors to increase equity by adding value.Population and Economic Growth: Phoenix remains among those cities in the country which are attracting more and more residents and business; therefore, this presents good, long-term appreciation possibilities of property appreciation and income creation.Challenges to ConsiderWhile the rewards can be great, distressed property investment is not without its challenges.

Bear in mind that the fiscal treatment of the two options in Mexico is different (withholding tax on the gross income with the fideicomiso vs cost deductions with the corporation).

This virtually guarantees increased cash flow.- equity pay down is guaranteed.  

Use umbrella insurance as an additional safeguard, especially if you opt not to form an LLC.Avoid S-Corp taxation for rentals, as rental income is passive and not subject to self-employment tax.

Never a guarantee regardless of who is involved.

Could you go reinvest it in another property to build even more income?

Spend what’s needed to upgrade with reliable mechanical systems, roof that doesn’t leak, remediate all mold; interior design modernized; in other words a place that will attract a higher income no hassle tenant.  

Also, focus on 2 years of job/income stability.Class D Properties:Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciationVacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions.

in my experience doing this in Vegas - the gross rental income is about 50% higher.