In this example the initial investment would be $50,000.So the owner of the IRA would have to pay 37% in taxes seems to negate the interest paid of 12.5% annually.Do I have this correct?

However (to go into detail requires a separate post), that's not quite the correct course either.

This is correct, so I would disclose every aspect of the sub to and how it relates to the seller, perhaps going so far as to insisting the seller sign off on an acknowledgment that he understands the ramifications.  

Depending on the specific area, you’re correct in that cash flow is more likely than appreciation.

Now that you have the correct terminology, you can search for lots of potential solutions. 

If I'm understanding correctly this means I can't build an ADU, but if I can divide the land more evenly between the plots then maybe two single families are possible.Exciting stuff!

Very few people operate their LLC correctly and therfore this just gives them a flase sense of security.Moving into a LLC can also trigger the due on sale clause.

There could be a million reasons as to why you didn’t achieve that goal, but course correct and get it next year!

Don’t worry about being correct.  

Start early, raise that equity well in advance, and make sure all those forms and verifications are filled out correctly.