The advantage of buying this way versus a self directed IRA is that you can avoid all the self directed IRA shortcomings such as You cant directly fix up the place or do any improvements yourselfYou or any relative can’t stay in the place (if it’s a vacation rental, it’s nice to stay there plus it lets you know the quirks/updates that could use your attention that you’d never have realized unless you spent the time there)Also if it appreciates say 300k to 600k, to extract the property out of the IRA you must pay tax on the new appreciated price.Am I missing anything here?

@Daniel Ditto Personal name versus LLC makes a huge difference.Using your personal name allows you to use conventional investment property financing.

Cap rates are used to boil different apartments or commercial properties to a comparable number; namely how much net income do they bring in versus the cost of the property.But they don't account for risk, hassle or potential upside.

Most of these club owners choose to settle for thousands out of court versus fighting in court.

Great question Nicole as you've stimulates so many great and varied responses which are tough to add to.I'll focus on the "WWYD" component of your question and the general principles I would follow versus giving you any more advice on what you should do.Rule #1: Don't lose the money.

The overlay is tempting because it will save me a few grand, versus a complete tear off.

Don't change the leases...first, you legally can't - and second, you want the opportunity to increase rents and shore up lease terms to happen sooner versus later so let those suckers run out. 

I think there is still be stigma about how much building should cost versus pre-2008. 

Here (and probably everywhere) there is a set of laws governing Landlord Tenant relationships versus Buyer/Seller relationships, so if your documents are not very clear on when that changes a lawyer can tear you up for trying to evict a "tenant" when they say he has equitable title, because some of it was going towards the purchase... 

@James NarlisYou are most likely going to get a lower interest rate with conventional financing versus private money.Are you looking to live in one of the units?