When you die the outstanding loan will be offset against cash value and whatever is left is distributed to the beneficiaries.

You can not use the property while it is owned by the retirement account, the only way for you to enjoy the property is to remove it from the 401k by taking in-kind distribution. 

I've read that you can take a property as a distribution and then live in it in retirement.How is that valuated at the time it's taken as a distribution?  

the reasons we use LLC's is there can be uneven distribution.. % ownership has no bearing on dispensation of P and L..the P and L question should be spelled out in your operating agreement.. like you posted above you ge 10% of profit or loss and the other partners get 45% .. if that's the agreement then makes no matter who owns what % of the LLC>  even if its not in writing and you guys agreed to it verbally then your not entitle to 33% since your third owner of LLC.. just take your 10% be happy your making some money.. save your money far to unimportant to go running to an attorney.. unless your partners are trying to totally stiff you can pay you nothing.

I have done both of these techniques multiple times.

How long have you gotten away with this technique?  

Manufacturing and distribution are more of our core businesses.

Since the source of the down payment must be verified and strict limits on seller contribution toward buyer costs, this technique would not work on any government backed loans such as FNMA, VA, FHA or USDA.  

A technique along the lines of that which I've seen in my state (check with your state's zoning laws) is what is called a condo conversion--where they take an SFR and turn it into a 2-unit rental by separating the two. 

One big reason is that if there is a distribution out of the S-Corp it is treated as coming at FMV and not basis as is the case in an LLC taxed as a Partnership.