I don't know about the "coming back to haunt you" comment, but I do agree investors should consult with a knwoeldgable CPA on this topic.Depreciation recapture can come into play, but there are several factors to consider such as: You are receiving tax savings today and then repaying with tomorrows dollar (and we all know the dollar will be worth less tomorrow than today), if your current marginal tax rate is at 28%, then the recapture tax rate of 25% is slightly less, and if the gain derived from the building is less than the depreciation taken, you may only recapture some and not all of the tax.

This is an apartment building.Gross rents: $142,800Expenses: $80,000(includes 5% vacancy rate) derived from APODNOI: $62,800 (gross -expenses)Debt Service : $40,000 (approx) I don't know when the leases are up.

Today, with the big data we have, it is actually quite apparent that the data that is available, is inadequate to derive adjustments in any manner even remotely reliable - real estate data is simply subject to too many variables to pin exact amounts down.

Here is a list of lenders specializing in these types of loans:https://www.biggerpockets.com/member-blogs/2810/50272-list-of-non-recourse-lenders-for-self-directged-ira-and-401kThe proceeds belong to the IRA and can be used to reinvest (buying another property, lending, etc.)There are no tax on borrowed money, but there would be some UBIT tax implications on the income derived from the financed portion of the property.Hope this helps!

.#5 Practice, Practice, PracticeWalkthrough potential rehab properties (or find properties virtually online) and practice creating detailed scopes of work, quantifying repairs and estimating rehab costs for the projects.Once you get some experience estimating costs or get a few rehabs under your belt, you will be able derive your own 'formula' that you can use to quickly estimate costs and analyze deals.  

An appraiser can look at those net energy cost savings to derive value.  

Then you will know how your IRR is derived.

@May Emery it sounds like that FSS list is derived from credit data.

I had three years interning in the field and I was getting BLOWN up by offers from various Mortgage companies, so I finally decided to cut my losses at $40k of debt, enter the work force and stop racking up debt that I'm really not deriving direct, tangible value from. 

So I wrote up a cover letter explaining how I derived my offer and submitted the letter of intent.