I learned about self-directed IRAs so I moved a traditional IRA I had over to self-directed and bought a rental with the funds.

I think its great that people are thinking of over ways of generating an income other than the traditional 9-5 methods.  

You can put around 20% down and buy with traditional financing (cheap 30 year money).

The sale price is $10k more than retail comps in the area (maybe even after adjusting for the garage and other items you mention) and it needs work.

I'm new to running this type of analysis so bear with me.In calculating the NOI, I've seen examples where the major expenses (taxes, maintenance, insurance) are still counted as an expense to the owner (even though commercial leases are typically NNN) and then it's balanced out by a line item to the income for 'tenant reimbursements' which is essentially the tenant paying the owner back per the NNN.Every example I've seen has the tenant reimbursements be exactly equal to the expenses such that it's a net zero to the owner.

If the challenge is "selling" a deal on a burnt out shell to a conventional lender, try this: Get private or hard money to acquire and rehab, get leases signed, THEN refinance through a traditional lender if you can meet their LTV requirements.Again, it's only a 4-unit.

The deferred maintenance arent major items but they need to be taken care of....landscaping, replace some sod, paint the exterior, minor drywall repairs, replace a shower door...overall the house is solid.

The trend is for those who would traditionally be in the "first time home buyers" chapter of life are increasingly opting to rent.

Sales tax exemption is for those purchasing items for resale, where the sale tax is taken at the point of resale(or for non-profits like churches)You do not collect sales tax when you sell the flip(or flop)

She would have a hard time selling it through traditional channels.