Assumption is that I carry the mortgage, 595k and also pay about 80k for the rest of the down payment, FF&E and interior updates. 

Property Insurance:   Probably a "Builders Risk" policy.  

(I.e. 2 x 200k rentals will bring in more rent with less risk than 1 x $400k property. )If you have time I’d be glad to talk real estate while you’re in town.

Flipping in the uk has low transaction costs and therefore makes lots of sense, but this post (below) made me a little crazy because in the US, transaction costs make sure the entrepreneur with all the risk/work gets only half the profit....even if it goes well....whereas the realtor(s) and money guy gets half ( or more) of the flip for close to zero risk.

Did anyone aware of this risk, if so how do you mitigate the risk?

So you tell them you'll give them the 15k if they will carry the rest for a certain period of time and whatever rate. 

I doubt your llc will qualify for the 20% deduction...there a lot of requirements and other professionals such as lawyers, doctors and accountants specifically do not qualify for it, regardless of entity structure.BTW, since your llc wouldn’t be a licensed brokerage, yes you’d be violating licensing laws and I suspect are putting your license at risk, if that matters to you.

That is certainly one smart way to approach this plan, particularly in the early days where minimizing risk is essential.In my experience, starting out as a Joint Venture is an effective way to team up with another investor.

But at the same time, I don't want to deal with "high risk" properties, either, so that seems to be good medium.

Most of the scenarios proposed to us by potential clients for such joint ventures would likely create a benefit between the parties and not pass scrutiny in an audit.There are many ways to safely and productively grow your IRA investing in non-traditional assets such as real estate in a standalone fashion,  There is no need to take unnecessary and foolish risks with your retirement savings.