@Lisa GarrettYes, a self directed IRA is just like the IRA you have, but with different investment choices.  

My wife and I are making the conscious choice to delay purchasing the home we want until our real estate has grown enough to support it. 

If your one lender bets wrong on the direction of rates or underwrites a large non-performing portfolio they could get a hair and start doing weird things.  

Property going through probate, if the heirs of the decedent agree, is your best bet on a transaction. 

Drive an hour south and I bet you will find something more reasonable and it might cash flow.

The right/wrong choice can make all the difference.

I think your choices were awesome...from house, clear thru rehab choices. 

Lend only in first position.Limit yourselves to 70% of ARV using an appraisal done by an appraiser of your choice, paid for by the borrower.Secure the loan with a mortgage or deed of trust, whichever is used in your state.Have an attorney prepare the documents. 

Being pissed about what someone does in their private life is certainly anyone's choice. 

Think the best bet is just leasing with a completely separate option.