You might find that your time is better allocated with your active re business. 

Basit - tk u to you ... that sounds familiar - no penalty on the withdrawal... was told everywhere it has to be pulled out within ten years...i had rolled into into my own acct from hers...the company said it was a non taxable event to do that, and that i could then change allocations...so opened a new acct which is still an inherited IRA... with that same organization.

Banks in my area generally require 20% down for non-owner occupied properties and 5% of the purchase price is allocated to closing costs, however this is specific to certain areas so double check with members in your area or local banks.

What actually happened matters.The interest needs to be traced.If you bought a car with some of the loan proceeds, the interest allocable to that is personal in nature and not tax deductible. 

The question is should I make a business plan based off of the real estate strategies I plan to allocate the profits to to get funding??

The 1% rule is just one quick guideline you can use to allocate your time and resources. 

You can allocate your proceeds in any way you want as down payments or whatever in the new purchases.It's all a numbers game for you to play with.

I have allocated $100 a month for water.

I think if you interview me, you will have to allocate 2 episodes because I've done so many mistakes :)Here's part 1 of my 3-part story:https://www.biggerpockets.com/forums/55/topics/690349-from-bankruptcy-to-1-000-units-part-1-thru-the-dark-tunnel

In my case, I allocate funds to buy the property and then I sell on Lease Option to a Tenant Buyer and get $20k to $25k from them.