The loans are already pkged and sold. 

I just helped an 18 unit multifamily owner who sold his property move the funds into the Deferred Sales Trust.

So it sounds like it will be "tax-free" initially, but when the complex is sold after about five years I will be taxed on those monthly distributions.

At a certain point of levied amounts being non-collected, it is sold to recoup the funds. 

A property we recently offered $850K, thinking that was a good deal, that we pulled out of during DD due to risk on our value add, just sold off MLS at ~$720K.   

Which will make it 4bed 2 bath, and some 4 beds on the same street shave sold for 220k. 

I just completed a 1031 exchange where I sold a home in east county in an hoa to do a 1031 exchange and purchase a multlifamily in South Park of San Diego which has room to add 4 more units.

I just used cash to build my first 3 specs no loans at all.. once done and sold then I went to lima got one loan from them.. then went to local bank ( much much cheaper) and got a 3 mil  guidance line and went on to build 30 or so in charleston.. you have to prove the model.. its not like buying a rental where lenders look strongly at your fico  fico is required but not the main consideration like and investor loan and all you need is 20% down or 30% down and a few bucks in reserve that wont fly with spec loans..

I have 250 agents in my market and half of them have only sold 1-2 properties.TIP: look for a property manager first.

And would this be considered "capital gains" since it's re-sold under 1-year therefore having to pay a large % of tax on the profit?