If they are only seeking a check every month and the largest amount possible based on the equity of this other property then sure it's a fine decision.A couple other thoughts though:With a smaller multi-family a vacancy is felt more financially than with a larger one, but the extent of that is influenced by the market's local metro and property location; andWhy not use some of the equity from the property to fund the purchase of the smaller one and then have two properties generate (probably) the same amount of income or more with debt service on both.  

;Roth IRA funds are not subject to requirement minimum distributions (RMDs);The fair market value (FMV) of assets held in a self-directed IRA is reported on form 5498;The fair market value of assets held in a solo 401k are reported on Form 5500-EZ;At termination, the solo 401k is required to file a final Form 5500-EZ and 1099-R; andAt termination, the self-directed IRA is only required to file a form 1099-R.

Actually, it would be better to ask a finance type attorney, notes aren't real estate but this is a basic business contract aspect.

You are on a fine line as a Realtor and marketing homes where you are making a profit instead of a commission.

Then, after taking in all the guru stuff, poor information, bad advice and note scam adverts, go talk to a finance attorney, if you have money to buy notes you have money for a good finance attorney.

Being in Escrow, I have a fine line to walk before muddying the lines and my role, so investing has been hard to do.

I needed a final, "move on" boost! 

;Roth IRA funds are not subject to requirement minimum distributions (RMDs);The fair market value (FMV) of assets held in a self-directed IRA is reported on form 5498;The fair market value of assets held in a solo 401k are reported on Form 5500-EZ;At termination, the solo 401k is required to file a final Form 5500-EZ and 1099-R; andAt termination, the self-directed IRA is only required to file a form 1099-R.

Delay the closing, get the repairs done, get occupancy back to where you were and then do a final walk through and go to closing.

Find an accountant who has clients in that industry and have them go through the disclosed financials with a fine toothed comb.