So what is the downside if you are deferring taxes through your self-directed 401(k) that is later deemed to have engaged in a prohibited transaction because the owner was serving as trustee?

I would add that if you have no landlord experience whatsoever you might be better served be starting with a smaller property and work your way up to a foreclosure.You mention that the property is a foreclosure, but you didn't mention how many units are vacant.

Don I would love to hear you post more on this and how you did it.As for the rentals even in an "A" area you can have pockets of working class tenants in older buildings.Example: You have an "A" area where incomes are high and shops are fancy.The higher income homes have to have people work the lower paying jobs in the area to serve the higher income people.So you will have developments with older apartments where normal rent is 1,200 but these tenants pay 800 in older buildings to be in the area where they work but cannot afford to go to most of the places there.So an "A" location isn't a guarantee of not having any problems.Screening the tenant is critical.I find when you buy to calculate having the best product at the lowest to middle part of the rent range.This creates a ton of applicants and you can choose the best one able to put down the most security.If you have a good to so-so product trying to get higher rent because you purchased wrong then you will be in trouble because the only tenants wanting to pay higher rent for a mediocre product are generally professional tenants.I stay away from the war zones.

I did leave for a little while, served 6 years in the Navy and got to spend a couple of years in Italy and then 2 years in the Philippines back when Mount Pinatubo erupted.I'm married, have 3 boys and 1 daughter of my own.

Again, $400 rent, even on a $25k house is too low..taxes, cost of money, insurance and maint will eat it up and you're served nothing but an alligator....in my opinion.

On the other side of that, my parents live only 10 minutes away from our house and I believe they would have no problems serving as a liason so to speak for us and also looking after the property.So after all of that I have a couple of questions.

The bottom line is that wholesalers and realtors serve different clients.

It just does not serve that purpose.It is not a fee that a consumer is paying to "get" the loan.

It's first come, first serve.

If the market turns you'd be better served being in 78704 or 78702 given the proximity to downtown.