You can also deduct this compensation to you as self-employed health insurance on your 1040.If you were a member of an LLC (owned your own, or had a few partners), you would be considered self-employed.

Hello BP,I am looking for someone familiar with self-directed IRA investing or a custodian to come and speak at one of our local meet ups here in Minneapolis.

Even if you want to self management now, there might be a time when you don't.

Bathrooms, toilet rooms, closets, halls, storage or utility spaces and similar areas are not considered habitable spaces.Habitable space requirementsCeiling height-RequirementsR305.1 Minimum height.Habitable space, hallways, bathrooms, toilet rooms, laundry rooms and portions of basements containing these spaces shall have a ceiling height of not less than 7 feet (2134 mm).Exceptions:1.For rooms with sloped ceilings, at least 50 percent of the required floor area of the room must have a ceiling height of at least 7 feet (2134 mm) and no portion of the required floor area may have a ceiling height of less than 5 feet (1524 mm).R304.4 Height effect on room area.Portions of a room with a sloping ceiling measuring less than 5 feet (1524 mm) or a furred ceiling measuring less than 7 feet (2134 mm) from the finished floor to the finished ceiling shall not be considered as contributing to the minimum required habitable area for that room.Floor space- RequirementsR304.1 Minimum area.Every dwelling unit shall have at least one habitable room that shall have not less than 120 square feet (11 m2) of gross floor area.R304.2 Other rooms.

For example any pets may result in eviction etc. because a lot of people interpret "no pets" as pet restrictions for pit-bulls etc. even though this is not the case, because many who self manage do change their policy especially if their unit has been on the market for a long time.

Beau,  In all of the cases that we have looked at doing this, it never seemed to be cost effective to redo the wiring & plumbing. 

Does anyone any an example Operating Agreement for an LLC set up for a Self Directed IRA to invest in real estate?

If there's a good deal of equity in the house, maybe consider a HELOC to pull some equity out and recycle that into another property or two in an area which hits your metrics more effectively.

I'm surprised the demand hasn't outdone the supply (limited supply due to regulation) and effectively driven up prices even more.

I have owned vacation rentals since 2010 and currently have 6 of them that I self manage.