IRS audits zero in on payments to kids and expect a taxpayer to show the amounts paid to kids are for arm's length type work.

I told them that my latest instructions, i.e. not to reschedule the plumber/cancel his services, and that I did not explicitly agree with this amount.

If this was a straight arms length transaction, then that would be one thing.

@Sherri SouthwellIRS rules does not allow you to commingle your personal funds with your retirement funds so you need to keep that in mind and make sure that all transactions involving your IRA are at 'arms length'.If you simply act as a private lender in this transaction - your participation is passive and therefore all gains will be sheltered from taxes.

My wife comes from a fairly frugal family so it only took a little arm twisting to get her to understand the plan.  

Not sure how this suddenly becomes disputable except perhaps this being not the most popular fact on a rei forum:)They are two different animals for sure but at the end of the day the passive paper animal covers the rock and wins.Your "academically proven fact stocks beat rei on average," is premised only on asset values plan and simple.There is no consideration to:- equity creation- market efficiencies- accessibility- control- tax advantaged returns and asset transferability- cash flow- leverage- risk mitigation- etc.If the point is to compare two peices of publicity in a narrow view negating all other factors from arm chair Ivy league people who may or may not have ever invested  then sure stocks beat REI.I've traded equities beyond these index comparisons with options via speculation, income strategies, shorted positions, and other strategies but the reality is it takes a lot of tracking, waking up early mornings, setting up and constantly modifying your software, and more brain damage then REI if.

I am doing 20% down, 5/30 ARMs at about 3.62%.

Going with a 3x the rent rule regardless of voucher will eliminate just about any voucher holder, effectively banning Section 8, even if you don't explicitly state such.

@Owen D.I have heard  any a investors say a $100 a door is a good deal, but I can now see it certainly not without including a Cap Ex along with your PITI   " To be fore warned is to be fore armed". thanks for the heads up and good luck.  

When I was doing mortgages I had a guy that was buying Phoenix rentals with 5/1 ARM's expecting to refinance them after they appreciated enough.