$260k trust. Can I take out a loan with the trust(collateral)

$260k trust. Can I take out a loan with the trust(collateral)

Miami, FL · Member since 2016 · 5 posts · 0 votes

Hello guys, just finished the beginners free course. Exited to be here and committed to learn as much as possible. So a little about me. I have a trust in the amount of 260k and work part time making little money for now. I'm getting a masters and will be making 60k in a couple of years. I m thinking of either taking out a loan with the trust as collateral if i can, don't know if you can do this, maybe you guys can answer this question for me. Otherwise i ll save up enough money after I'm making 60k a year to o=out some money down in a FHA loan for a duplex or quadruplex? While fixing it up with the money they lend me cause that's the beauty of a FHA loan, while renting it and then selling it after one year or two years while doing the 1031 exchange.

I actually don't know what niche or strategy to pick. I just said FHA loan cause it sounded like a good idea by renting it, fixing it and flipping it, while living in it.

Thank you ahead of time,

JPV

PS: I also live in Miami

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  • Investor · Atlanta, GA · Member since 2015 · 42 posts · 14 votes
    9y

    The IRS has ruled that properties that are purchased for personal use are not investment properties, and therefore do not qualify for Section 1031 treatment. The FHA can only be used for a personal residence. Maybe you know a trick I don't, but that's my understanding of it.

  • Realtor · FL · Member since 2013 · 372 posts · 83 votes
    9y

    @Jean Pierre Viergutz, 

    Congrats on the proactive approach with starting here to this site. This website has helped me and numerous others to our success in this business. Allow me to invite you into a small group of investors here in south florida (miami and broward). We are developing a meetup group and our main adjective is to spread our individual risk into large holding properties (5 plus units). If you are interested I would be more than honored to explain in detail. I look forward to hearing from you soon. 

    Regards, 

  • Miami, FL · Member since 2016 · 5 posts · 0 votes
    9y

    Hey @Marc Yu , thanks for answering. I learned in the intro course that although FHA is for personal use, you could still rent it out to somebody if living in a duplex or any other multiple form of housing. I can remember exactly but I know the into course mentioned something along the lines that after one or two years you can sell it. The FHA loan you could also get a loan for rehab.

    Thanks for answering also @Duriel Taylor, I would be very interested, however I would need about a few months to gain more knowledge so I understand the strategies and RE investing of the small group of investors you are part of. I would also have to find out if I'm able to hold the trust as collateral and be able to invest part of my money along the group's funds. Thank you for reaching out

    JPV

    PS: any more comments and info would be appreciated

  • Dave FosterBusiness Member
    Qualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes
    9y

    @Marc Yu, There's a sound strategy that @Jean Pierre Viergutz is pursuing. Yes, the FHA loan is for owner occupied housing. However, Guidelines allow Multi family up to 4 units I believe. If he's thinking what I think he's thinking Jean Pierre will house hack that fha quad. After he's owned ut and lived in it for 2 years he can sell that and he will be able to take out the gain from the portion he lived in tax free. And he'll 1031 the remainder so that will be tax deferred. And he'll do all of that with ultra-favorable FHA financing. A very legal and well thought out plan.

    The 1031 Investor5137 Reviews
  • Miami, FL · Member since 2016 · 5 posts · 0 votes
    9y

    Thank you @Dave Foster @DaveFoster for clearing that out. 

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