It seems like a fairly thin spread given the risk on your behalf and the ability to sell for $2.2MM (don't forget commission is coming out, so that's $132,000 if 6%). 

You will have the ability to move it once you leave.2. once you leave, you have the option of A.

The heart of the question I'm asking is can this: Do we have ability to get into the position of this new investor on the basis that the seller didn't have the legal right to sell the property to him?

Lenders have the ability to add-back one time items on a return.I guess the follow-up question should be, should the renovation been deducted or capitalized on your return...

They may be in a position where they don't need the chunk of cash and by taking payments, they have the ability to make a return on their money.

In addition, if you are self-employed with no full-time employees you may wish to consider opening a Solo 401k instead of a self-directed IRA as it has several advantages over an IRA LLC such as much higher contribution limits, direct checkbook control (i.e. no need to have the account at a specialty trust company), ability to take a 401k loan, exclusion from unrelated debt finance income tax with respect to investment in real estate acquired with non-recourse financing, etc.In addition, please note if you purchase debt-financed real estate with your IRA, unrelated debt finance income tax should apply to the income attributable to debt-financed real estate held by your IRA.

It relies on you and your ability to buy a distressed property from a distressed owner at a discounted price.

I have an eye for design as well as the ability to make it reality.

What are your thoughts about putting your real estate experience on your resume (Renovating properties, managing tenants, good book keeping abilities, etc). 

Low acquisition cost, good long term tenants, cash flows positively, under market rent with ability to increase cash flow.