Opinions differ on this, but to me, a company that requires cash has a liquidity problem that could be indicative of issues higher up the food chain in their business model.

In the process of adding closed cell spray foam everywhereWhat was the outcome?

For this reason, it’s important that the self-directed solo 401k maintains enough liquid cash in order to cover expenses such as HOA dues, property tax, etc.

My "cash" is a stock portfolio (essentially liquid) valued at 10x the rinky-dink loan amount in question.

@Tim ZajicekMy clients have found them very useful not only for passive ownership, but appreciate their flexibility with investment amount and portfolio diversification (by sponsor, tenant, type, liquidity, and geography.)

In regards to 20% down, if you are planning to owner occupy and renovate property you may want to consider less money down and using the liquid cash to instead renovate and force the equity.

Usually when sellers understand how liquid mortgage notes can be, will understand seller financing -  The "Split Note" clause  helps when needed.

To determine your maximum purchasing power you will take your gross monthly income multiplied by .45.... or .55 with compensating factors such as large liquid assets, large down payment, high credit score etc.   

It will establish how funds are handled, how you will liquidate and what work each partner is responsible for. 

Since larger deals typically are a team sport, the combined liquidity, net worth and credit is what gets a deal done.