This significantly increases your profit margins and allows for more reinvestment into other properties or projects.

Hi Ian,I might do that deal if I also felt that the rental amount was projected to go up (like in a high growth market) or if appreciation looked to be promising and I wanted to exit the investment in a short period of time but in general, by doing the deal with only a 6% profit, the margins are slim to make it worth it in the short term at least.~ Lindsey

Look for properties priced at least 20-30% below market value to account for renovation costs and profit margin.

Even with only $1000 in rent I’m still over a 1 to 1 ratio (was not taking out a lot of equity) but under a 1.25 ratio.A lot of investors have the equivalent of llpa’s at 1.0x, 1.1x, and 1.25x, meaning that your rate/pricing will likely be marginally different at each threshold.

If it works it would eliminate most appraisal gap concerns and I would earn extra margin on the post-closing repairs.

Otherwise, you pay income tax at your current marginal rate on the $100,000 distribution you mentioned, plus income tax on subsequent profits from the investment (which you would own personally).Consequently, I'd compare your projected returns net of all taxes on the real estate investment (1) based on taking a current distribution of $100,000 and holding the real estate personally, and (2) based on holding the real estate investment in the inherited self-directed IRA.

Thank God this property had plenty of profit margin and easily covered this balance!

Virtual Assistant would be less affordable but you would have a higher margin and JV partners would be possibly in many cases be less reliable but would be possibly be easier to collab with more holistically. 

Get the plaster tested for asbestos.If renovations significantly reduce your profit margin, wholesaling the property to a more experienced investor might be more viable. 

Or get with an expierenced realtor, commit to 1031, and increase portfolio by considerable margin and sacrifice cash flow now?