Not meeting the 1% rule, BUT initially I would live in it.

I had ZERO intention of purchasing a SFH in CA for all the obvious reasons (cost, taxes, eviction rules, etc).My GF reminded me that I could purchase here under FHA loan, thus somewhat bypassing the insanity of high down payments.

One common rule of thumb is to take 80% of the purchase price for improvements and 20% for land.Another way to do it is to look at the county's values for both land and improvements and use those to determine the percentage. 

@Matthew Ward Any upgrading or remodeling would need to be capitalized and depreciated unless it's small enough to fall under the de minimis safe harbor rules but you'd need to talk to your CPA about that election.Generally a large part of remodeling costs would be considered tangible personal property that could be depreciated over 5, 7 or 15 years as opposed to the long life depreciation schedule of 27.5 years for residential rental property or 39 years for commercial property. 

Admittedly I need to go look at more homes in the area to get a better feel.)70% rule = $154k- Rehab = $50k  (Mind you I've not priced everything out, which would be my next step, but I have a list of everything that should be done)Thus I should offer them a $104k, or walk away?

Wondering if there is a way around this rule.  

I was told this last year, so rules and requirements may change.

@Shera GregoryOn another note, you will want to make sure the  LLC operating agreement includes language surrounding the solo 401(k) rules.

@Victor MarquezQuick answer is no.The rules do not allow for one to lend his or her IRA or 401k to a company where the participant is is partner, manager, director or employee.See the following page link: https://www.irs.gov/retirement-plans/plan-particip...

well mine is ancient history 1977 ish.. you could only get 80% financing in those days.the bank allowed a private second.. that's what HML did they did the 10% second as there was no rules against owner occ.. then the bank did the first and you had 10% down plus closing costs.but one year of income worked as well.