Regarding tax-advantaged accounts, you're right--there's always a tipping point where conventional rules no longer apply. 

The conventional financing guidelines were designed with the primary end user in mind for the most part with slight accommodation for investment or non owner occupied use (75% of gross income and other simplistic rules).Good post Ruddy!

And much more...I am new to the forums, so if I broke any of the rules, I am sorry in advance.

:1)Find an investor who would double as a source of money for down payment and a cosigner2)Use an FHA loan (3.5% down if I live in a unit) to buy a quad-plex3)Use the 203k aspect of the loan to improve the quad-plex and force appreciation in the property4)Refinance in a year or two to a regular loan and pull equity out to either pay off my outside investor or use equity for another down payment on another quad-plex5)Repeat With this plan, I believe I will be able to cash flow from day one because I will be able to rent out three units to college students around campus who are willing to pay higher rents than most.

You just have to be firm on the issues and with any rules fairly enforce.  

The rule is actually that you have 180 days or until the date of your next tax filing.  

Mortgage is ~$500/mo, collecting rent of $600/mo...not much wiggle room with the 50% rule there.

Keep in mind that any existing assets you own could not be sold to the 401k because of the prohibited transaction rules.

Hi @Ryan Woodward,Do you know how to calculate marginal ROI on fixes/improvements to REO?

You've done a few loans and now you know the rules of engagement and your lender can trust you to pay their money back.