Here are few:No need for a custodian (save $$ on transaction and asset based fees)Checkbook control - you don't need to ask custodian consent to make the investment, simply write the checkRoth sub-account - in essence you can have two accounts in one: regular pre-tax as well as Roth after taxHigh contribution limits up to $56,500 per year, this is nearly 10 times more than an IRA.

Matthew,As a resident of California, you can still expect to pay the California income tax on the amount of income you receive as a resident.What's being discussed above is a privilege tax. A

You can not use conventional loan since you are not allowed to provide personal guarantee with self directed IRA.Also you need to be aware that leveraged real estate inside of a self-directed IRA will be subject to UBIT (unrelated business income tax). A

Income from wholesaling and rehabbing is considered ordinary income and is subject to self-employement tax. As

Here are few:No need for a custodian (save $$ on transaction and asset based fees)Checkbook control - you don't need to ask custodian consent to make the investment, simply write the checkRoth sub-account - in essence you can have two accounts in one: regular pre-tax as well as Roth after taxHigh contribution limits up to $56,500 per year, this is nearly 10 times more than an IRA.

Unlike passive rental income, the income from an active trade or business is subject to self employment tax (a nasty 15% tax commonly referred to a "social security and medicare" by working folks).

If it's not their primary there will be a capital gains tax as well, and perhaps depreciation recapture if it's a rental.

TomThe homeowner already should be paying a higher tax as you just mentioned he does not live in the property.

Also find out how long he wants to spread the capital gains tax as an installment sale.

I thought this was weird or some sort of a scam, because I bought the property thru a mortgage, so I pay property tax as part of my monthly escrow payment.