The other option is if her new employer has a 401k, see if they allow a 401k loan. 

I have a borrower (self-employed) who is purchasing a 640k property in Orlando area who has had to clear up unexpected conditions in order to obtain a loan commitment, but he has done what was needed and we're back on track.However, we need a few days closing extension and the Listing Agent is difficult, likely because from what I hear, she has a buyer ready and she would get the entire 6% Points real estate commission.I'm trying to be nice, but the listing agent and her title agent refuse to surrender the seller's contact info. 

Do we pay a self employment tax on this?

I have been considering rolling my employer-sponsored 401K into a checkbook/self directed IRA for the purpose of providing hard money loans because I am DISGUSTED by the low ROR I get now.  

I haven't employed this strategy yet and my only credit card is fully paid down.

I'd love to be able to do this full time someday or at least be able to generate 50k per year from this in addition to my current employment income.I've been a landlord for about 6 years now so I'm not necessarily new to the business.

But if you don't pay a salary, then you end up paying this in self-employment tax anyway.

A landlord buys and will at some point sell, they will finance, manage, repair, renovate, they may employ others to find properties, the may end up doing lease options, seller financing, you might sell the note, you might find a heck of a deal and decide not to hold it but flip it....you get the idea.A capital company can do all of these things as the top of a pyramid or on a lateral structure.

There's nothing illegal in any of the methods employed here.

Now if you had a workers comp policy, then you would end up covering any worker you hire; a year end audit would uncover that you had employed workers who did not carry their own coverage and so you would be paying additional premiums for the time (and tasks) that they worked for you!