However... that means that, to some degree, an LLC might not be well suited to operating in a different business, just because it is a 'business entity'. 

With that being said, you might be better suited identifying a market and neighborhood, finding a deal and then presenting your plan to someone to partner with you and bring the capital.

Commercial ownership is good because you can kind of house hack your Suite or get it nearly free.

Tenant placement is not my strong suit and this was well worth it for me.

A quiet title action is only binding on parties who are named and served in the suit. 

If you buy a SFH -- that is zoned single-family -- and that has a mother-in-law suite or basement apartment, you can rent that space while you live there but as soon as you move out, I'm guessing your local zoning code allows you to only rent the whole unit.

The type of self-directed IRA that will best suit your situation and goals will drive the process of identifying the right firm to work with.A self-directed IRA custodian is a processing entity.

I realize this is your first, so if you want to save some money on interest option number 1 might be better suited.

How many people (adults & children) will be renting this suite?

You could invest the remainder in real estate, stocks, bonds, be a private lender, whatever suits you best.