One of the main restrictions is self dealing. That is what you seem to be talking about. I’m sure that there are unethical or illegal ways to do it, but why.
You can partner with yourself and the prorata share go to you and to your IRA. But deferring or eliminating taxes is more important. If you can learn to get a good deal on one property in an IRA you can learn to do it outside the IRA and make enough to live on.
Let’s say I bought an apartment bldg. using funds from a self-directed IRA as the down-payment. I’m assuming all cash flow has to go right back into the IRA and, therefore, never to be used as “spendable” cash unless it was withdrawn and taxed and penalized.
However, is there a way to later transfer the asset out of the IRA into some type of trust or corporation so that the cash flow can be used elsewhere? Perhaps this could be done after all the inital cash investment was repaid??
It is my understanding that you can do this with a Roth IRA. Of course you have to pay taxes when you create the Roth, but then you can self direct how the money is used.