I welcome any and all input.Seller financing on a 40K dirt lot (R-1)25% down payment via wire transferQuit Claim Deed, notarized2 year promissory note secured by deed of trust, notarizedA few different County forms to establish taxable value, change of ownership, a legal description of the property, etc. 

Don't try to use real estate to reduce your taxable income on paper.

I assume that once all of our initial contribution is taken out that then it will all be taxable. 

Your 1031 proceeds the total debt needs to equal the new property or higher or you will have taxable boot.In California due to rent control, high income tax, overly compressed cap rates there is not much yield there.

In Collin County (Plano, Allen, McKinney) Texas, my $127k taxable value house costs $3,151/year (2.48%) in tax...

I dont forsee any major purchases or taxable income.

The conversion of property from investment use to personal use (and vice versa) is not a taxable event.

Wait, it Gets Better   - In this illustration, depreciation will be about $3K per year per house   - With one house, your cash flow is $7K and taxable income will be $4K   - With two houses, your cash flow is $9K but your taxable income drops to $3K50% LTV is a very conservative position. 

Assuming yes, when I take my RMD, am I still required to send in 20% withholding on portion in Roth 401k or just taxable portion.

If your IRA owns an ongoing, revenue producing business that is not "housed" within a C-Corp. or other taxable entity, then the business tax is paid at the IRA level in the form of UBIT.