Yes to avoid taxes and penalties (under 59.5) the money would need to stay in the retirement account.

Since pro forma's are a projection they are as good as their assumptions, as an investor, you need to agree with the underlying assumptions. 

Also, focus on 2 years of job/income stability.Class D Properties:Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciationVacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions.

I can really empathize, I've been under the knife many times.FWIW So far my kiln dried lumber is still going down & I only by American made electrical materials from Schneider corp.

It seems they were non-paying tenants even under the previous owner, who likely sold the property because of them.

And honestly, even a DSCR loan by itself, under an LLC, also doesn't provide much shielding. 

I exited the market due to the short term rental regulations - properties that are rented under 90 days are considered short term.

Also, focus on 2 years of job/income stability.Class D Properties:Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciationVacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions.

Also, focus on 2 years of job/income stability.Class D Properties:Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciationVacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions.

Anything under $90 in this area usually doesn't pencil out for me as a cash-flow interested investor.