This means the profits are subject to ordinary income tax rates (no matter the length of time you held it) PLUS self-employment taxes.

@Jennifer Bailey you just hit the nail on the head. 2-4 units can be profitable, but typically you have to self manage them in order to make the numbers work.

Account Closed is alluding to, in my self-storage scene, building materials have gone up around 50% in the past 1.5 years. 

I'm looking to partially fund a fix and flip using money from a self-directed solo 401k.

I would be living 30 min away from property and can self manage and do paint, carpet, minor stuff.

Since I'm self employed and being that mortgage compaines want 2 years of income.

I self manage 5 cabins in Gatlinburg Pigeon Forge from a distance and it’s no trouble at all.

I currently own two self-storage facilities (and soon to be three, this month) and hopefully there will be a small mobile home park in the very near future.

and continue paying for the mortgage on the first house whilst the second house sorts it self with rental.really what i am asking here is where does one live after their first investment purchase. do you rent somewhere else  and buy your first house for rental? 

Self rentals are a huge frowny face per the IRS.