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.  

I do understand the concept fairly well since it is pretty self explanatory but I do have a question in regard to the refinance or cash out on the back end.

With that I was going to add an addendum for an additional deposit if they would like an actual opener and offer the ability for 3 openers to combat that.I will look into self locking/closing doors.As for the parking rights. 

Kelly Yeah, we self manage.  

Then of course you have to make amortized payments back to your 401k.Another options would be to find someone else who has $10K in their retirement account, they will need a self-directed IRA and then they could make a loan out to you.

The numbers up there are all spread out... this is what they look like put together.Purchase price- $47,999Tax value- $110,000Monthly Rental Income- $825Taxes- $1,312Vacancy- 8%Management- 10% (self managing)Repairs/Maintenance- 10%Misc.- 10%

Yes, that's part of our "taking possession" checklist when we close on a new property with existing holding tanks.Because energy efficiency is part of our {self-imposed} mandate we frequently experiment with new ideas during major retrofits (hence the solar thermal DHW with in-line heaters for the final lift).  

However we kept all 6 properties back there and self manage them from afar.  

I believe you are referring to Self Directed IRA's (SD IRA or SDIRA)....try to do a search on them on here or online and educate yourself on them.Other reading....http://www.biggerpockets.com/forums/51/topics/63454-list-of-self-directed-ira-companieshttp://www.biggerpockets.com/forums/51/topics/64530-best-self-directed-ira-trust-companies-http://www.biggerpockets.com/forums/51/topics/58063-who-is-your-self-directed-ira-custodian-of-choice-why-http://www.biggerpockets.com/blogs/3258-self-directed-retirement-plans

Absolutely list the screening criteria you use ... you will find that it will help people self-eliminate then you don't have to deal with screening them.