LeeA self-directed IRA is simply an IRA with a different capacity for investing. 

I would also ask for proof of any other financial resources...IRA, savings, etc.

My dad is trying to convert his IRA to self directed.

Can my Self directed IRA custodian also become an investor or member of the same LLC?

You could invest your cashflow in a Roth IRA (up to $5500 per year).

@Michael DeFilippoA Self-Directed IRA is purely a diversification play. 

Maybe consider an IRA as an alternative but that also will have UBIT taxes, due to the flipping business. 

When reviewing the overall portfolio don't forget to account for your 401K and IRA plans if you have any.

I had funded many  SFH investments via my Individual 401k’s accounts, and Roth & Traditional IRA accounts, but as Attorney Trowbridge points out in 3rd Edition summary, the individual investor documentation, vs.

I currently do not own any RE outside of a few REITs in my IRA as I'm still learning and saving, I can envision budgeting the expenses separately as @Victor Saumarez mentioned.