The man with a million excuses claimed back then it was becausehe’s Turkish and a Muslim but obviously they knew his criminal record and hishistory and they wanted him out.

People should be able to draw a distinction between that which is purchase price, and that which is value.  

Perhaps some level of distinction so that tenants see me more as a manager of the property rather than the owner.

This situation is typically dealt with through an exception to the State's real estate brokerage laws, where a distinction is made between administrative tasks such as an agent/employee taking applications vs. things such as lease negotiations.Essentially you can't get around the licensing laws just by forming an entity. 

This distinction is important to handle the passive losses.

The seller's perception of themselves has no bearing on a buyers purchase money arrangements, in their opinion you're in the business and they are wholesaling, actually there is no distinction as you are the end user/owner.

I'm not sure about the distinction, but UDirect was adamant, so it must have to do with IRA regulations about SDIRA's.

(definitions and distinctions can be quite important, obviously)

There would have to be some distinct advantage in going the student rental route.  

In the Utah market, the distinction lies in "owner occupied accessory apartment" vs "legal duplex."