We accidentally acquired our first rental, and it wasn't until after our first tenant moved in that I did the math on it and realized that we would be earning over 15% on our money; that's when I got the REI bug.This might not work with your wife if she's feeling that the retirement savings/IRA/401k route is better.  

Namely: Diversification of my overall investment portfolio: Despite my IRA goals, an REI opportunity would help diversification. 

I have a SEP IRA that I set up for my contracting business.

I do the same with property in my IRAs but it really doesn't matter much when all income is tax deferred or tax free.

I also have $25k in a IRA that I could potentially roll into a self-directed IRA if it makes sense to do so.

I have considered using my IRA but there is one stipulation that has deterred me.

Instead you get to use those dollars to build your portfolio so you get the compound effect of profit and profit on the deferred tax - very similar to an IRA.  

I took this out before I knew about real estate and put it in various accounts, some IRA accounts and some just savings accounts. 

Is the only option a self dircted IRA?

I'm using the Law Offices of Ira T.