You will obviously make some money for "sweat equity" and will not have to take on unforeseen liability for the debt to build and then carry the home. 

It's the renovation that is way more then I expected so now I hope to make up for that with sweat equity.

Offer your sweat equity instead of cash, take little or no profit off the first flip you do together and consider that tuition.

I would LOVE to purchase the building and live in the current unit and put sweat equity into the vacant unit to rent ($1100/month) and raise rent on the lower unit if I am able to purchased $2000/month (current) to $2500/month. 

Once I get one property the idea is to build a portfolio but that will come with blood, sweat, and tears.

What do we want and how much sweat equity are we willing to input into the equation to make it happen?

You cannot benefit form sweat equity from the property purchased by your IRA. 

We fixed up our first home, it was alot of sweat equity but it allowed us to get into our place cheaply!

@Tony Johnson No sweat.  

I wouldn't sweat the 3.5% inflation..