"looked" into it , being I went to a free dinner where some guy talked about it :D
anyways, from what I understood, you can't touch the property... I mean you can pick which one to buy, but then it is hands off. You hire a management company and they do all the work, you can't do anything with it, can't live there, or have a friend live there or in any way have it benefit outside of it just being an investment. Because it is tax sheltered, they don't want you to be "using" it without paying taxes on it. or something like that.
but why? From what I've seen written on the tax code, having a house means having a lot of tax deductions which help overall tax bill. The main reason self directed 401ks seem to be pushed by this "get rich" seminars is because that's where most people have a sizable nest egg... most don't have taxable investments to use. But they can talk someone into using the 401k because money is there... and because the laws require you to hire a company to manage it... they also "provide" that after the seminar...