If funds are kept in the 457B plan, they can be withdrawn before age 59 1/2 without any penalty and only subject to ordinary income tax.Depending on your tax bracket, it might make sense to withdraw additional funds to invest in real estate instead of doing so in a SDIRA.  

It certainly isn’t out of the ordinary and unless they gave you reason specifically to not use them then I would move forward.

Maintenance of the furnishings is Tenant’s sole responsibility, and Tenant will keep all such furnishings in good repair, ordinary wear and tear accepted.

Lending and flipping (if you profit) will give you additional ordinary and interest income to report.

You make $500 from a rental (Sch E) - this would be taxed at ordinary income tax rate with no B&O or SE taxesYou make $500 (Sch E) and pay yourself $100 to manage it (Sch C). 

Some investors may not want to reclassify "carried interest" from lower taxed cap gains to higher taxed ordinary income. 

@Jeremy Masson Those terms are actually very ordinary in terms of hard money lending.

Mind you, I am only sharing my experience her as an ordinary homeowner who has done it before, but I did do my research.  

Gain is taxed at ordinary income rate. 

If you're doing a bunch of flips, the income you generate will be taxed as ordinary at your marginal rate (unless done out of a c-corp).