I am looking at a rehab deal where 2 houses can be picked up for the cost of back taxes (~25k combined).

You said you are married, and with your combined incomes, are you accepting taxation in a higher bracket on what you are putting into the TSP?

So QE in combination with Fed funds target rates of 0 have kept rates extremely low.

The key factor is this guy wanted a fixer upper and committed to doing some rehab himself, is qualified to do so, perhaps an unusual combination of circumstances?

@Angelo Mart - here's the problem that you run into with trying to do wholesale flips with REOs:  While you're doing all this LLC stuff, people like me (combination investor/Realtor with lines of credit already set up), we are finding these same deals on the MLS (cause we have our own MLS access) and we are making strong cash offers with POF.  

That said, I will NEED to create liquid capital for the aforementioned business, and thus, facilitating any combination of REI transactions with HUD (as described in the second sentence) can certainly provide that when done correctly.I look forward to hearing input from you guys!

As you will read in many forum post, many investors may have some combination of or even none of these items you identified as hurdles.  

That said, I will NEED to create liquid capital for the aforementioned business, and thus, facilitating any combination of REI transactions with HUD (as described in the second sentence) can certainly provide that when done correctly.I look forward to hearing input from you guys!

That said, I will NEED to create liquid capital for the aforementioned business, and thus, facilitating any combination of REI transactions with HUD (as described in the second sentence) can certainly provide that when done correctly.I look forward to hearing input from you guys!

I think the hassle factor with money coming in and out, the difficulty of financing, and UBIT all combine to make actually owning real estate inside an IRA unattractive.As @Dawn Anastasi mentions, making loans with IRA funds is a more attractive option.