You should consider investing in RE outside your retirement account as well since there are different tax benefits available.  

You get all the great benefits of owning real estate, without the hassle of tenants and dealing with the problems that always happen when you own real estate.

A restaurant or café with outdoor dining could thrive in this environment (there are not so many around the area), benefiting from the steady local traffic while also enhancing the appeal of the residential units.

Aside from the Debt-to-income ratio and risk benefits you've already mentioned, it also just helps keep everything organized.

But then on the positive side you've got the amortization of that loan, the tax benefit of depreciation and whatever appreciation there is.

Trying to bend the rules will always come back to get you and could end up costing you more at the end of the day than any benefits you gain from it.

So the benefit to investing in a note fund is that with no additional exposure, investors get access to a consistent return with less liability.Best,Dave

Renting it out would let you keep the asset, earn some extra cash, and possibly benefit from tax deductions like depreciation.

It is difficult to property vet these operators without learning on the experience of others - that is one of the biggest benefits of finding a Community!

I always recommend people ask for a free cost/benefit analysis to determine if they will benefit from the study.