In order to get a loan to do this (since I am self employed) we may need to go with a private lender as opposed to a conventional mortgage, so we would need a larger down payment.

I know that I am considered a disqualified person as I am a family member with direct lineage.Is it possible for his separate LLC to invest in mine (listing him as a MGR in my LLC - or not), or is it still considered self-dealing or him receiving indirect benefits?

It's often good to deliver this in person (if you are self managing) or have your property manager do it in person.

Mark C. these are good questions, which I have covered in some of my blogs (self promoting) sorry.  

I have also been kicking around the idea of a Self Directed IRA.

Remember Paint is just colored glue.You can scarify the concrete to remove as much as you can and then encapsulate the  concrete with a portland based self leveler ; Ardex, Mapei are a couple of national well recommended brands with good tech support.

I don't want to do anything illegal or get my self in a big dilemma. 

Any advise, please consider the fact that I'm self employed and may have some issues getting a mortgage right away unless I use a private lender.

@Shetal Gandhias a programmer, you are likely ahead of most REI folks in terms of what you can do with data.mash yourself a simple geodatabase from redfin csv's or assessor shapefiles. get up on qgis (20 minutes) and make some visual databases for your programmer self.

Regardless of your contractor status or whether or not you form an LLC, you will probably owe income tax and maybe self employment tax on any profits you make.