@Wen ChenNone of that is an expense.Costs specifically connected to obtaining the mortgage (appraisal, credit report, origination fee etc.) are combined into "loan costs" and then set up for amortization over the length of the mortgage.The rest is added to the purchase price and results in "tax basis" which is then set up for depreciation over 27.5 years, after allocating a portion of the basis to land.If this process sounds complicated (which it is) - you may need an accountant to help.

Following are the similarities and differences between the solo 401k and the self-directed IRA.The Self-Directed IRA and Solo 401k SimilaritiesBoth were created by congress for individuals to save for retirement;Both may be invested in alternative investments such as real estate, precious metals tax liens, promissory notes, private company shares, and stocks and mutual funds, to name a few;Both allow for Roth contributions;Both are subject to prohibited transaction rules;Both are subject to federal taxes at time of distribution;Both allow for checkbook control for placing alternative investments;Both may be invested in annuities;Both are protected from creditors;Both allow for nondeductible contributions; andBoth are prohibited from investing in assets listed under I.R.C. 408(m)The Self-Directed IRA and Solo 401k DifferencesIn order to open a solo 401k, self-employment, whether on a part-time or full-time basis, is required;To open a self-directed IRA, self-employment income is not required;In order to gain IRA checkbook control over the self-directed IRA funds, a limited liability company (IRA LLC)must be utilized;The solo 401k allows for checkbook control from the onset;The solo 401k allows for personal loan known as a solo 401k loan;It is prohibited to borrow from your IRA;The Solo 401k may be invested in life insurance;The self-directed IRA may not be invested in life insurance;The solo 401k allow for high contribution amounts (for 2018, the solo 401k contribution limit is $55,000, whereas the self-directed IRA contribution limit is $5,500);The solo 401k business owner can serve as trustee of the solo 401k;The self-directed IRA participant/owner may not serve as trustee or custodian of her IRA; instead, a trust company or bank institution is required;When distributions commence from the solo 401k a mandatory 20% of federal taxes must be withheld from each distribution and submitted electronically to the IRS by the 15th of the month following the date of each distribution;Rollovers and/or transfers from IRAs or qualified plans (e.g., former employer 401k) to a solo 401k are not reported on Form 5498, but rather on Form 5500-EZ, but only if the air market value of the solo 401k exceeds $250K as of the end of the plan year (generally 12/31);When funds are rolled over or transferred from an IRA or 401k to a self-directed IRA, the amount deposited into the self-directed IRA is reported on Form 5498 by the receiving self-directed IRA custodian by May of the year following the rollover/transfer.Rollovers (provided the 60 day rollover window is satisfied) from an IRA to a Solo 401k or self-directed IRA are reported on lines 15a and 15b of Form 1040;Pre-tax IRA contributions on reported on line 32 of Form 1040;Pre-tax solo 401k contributions are reported on line 28 of Form 1040;Roth solo 401k funds are subject to RMDs;A Roth 401k may be transferred to a Roth IRA (Note that from a planning perspective, it may be advantageous to transfer Roth Solo 401k funds to a Roth IRA before turning age 70 ½ in order to escape the Roth RMD requirement applicable to Roth 401k contributions including Roth Solo 401k contributions and earnings.)

Who they are using for tax accounting, property management, general contractor if any, mortgage broker, due diligence company, cost seg, insurance company, and etc.Review the additional fees\costs, if any, and determine if they are out of the norm depending on the experience of the sponsorship team, investment strategy, and asset. 

This is a people business and being nice will always be an asset, until it becomes a liability.

My understanding is the underwriter want to be assured you didn’t take on any unknown debt to obtain the down payment.

Insurance contracts offer additional asset protection, higher yields than most savings accounts/CDs, and there's usually liquidity (tax free).    

But good to keep in mind that it might be difficult to obtain a 203k loan in the area.

Also, Bulletproof Asset Protection teaches about asset protection, Who Moved My Cheese teaches about dealing with change, How to Win Friends and Influence People is one of the best books for personal development.

HUD 4155.1 5.b.7 (opens in .pdf) reads:The borrower may obtain a loan for the total required investment, as long as satisfactory evidence is provided that the loan is fully secured by assets such as investment accounts or real property.

Make sure you are experienced and understand the asset class that you will be purchasing.