Good afternoon,I have clients that are currently interested in a triplex property and qualify without an issue but the property itself does not pass the FHA self-sufficiency test without one of the unit’s income, since it has to be owner occupied for FHA due to one of my clients having a foreclosure on their credit that won't be removed until March of next year.

@Daniel Beaulieu Thanks I have another hurdle to get over not related to the funds that I hope to be past in a few months.

You didn't mention whether or not you plan to live in one of the units in the 4-plex, but I imagine you are or you wouldn't be able to finance with a 203(k) loan.I guess a lot of it depends on whether you have the funds to do the renovations without the loan, and whether you want to do some of the renovation work yourself?

I've put in offers on a few that didn't get accepted since being licensed, and before that put in an offer with owner financing as I didn't have the funds at the time, but I like the area and think it will improve as new development is getting closer and closer, sure to drive rents and values up on the older smaller homes.

You would get a EIN/Tax ID for the trust and use that to get a bank account opened for the trust to hold the funds and deploy capital as needed.

So he would fund the total amount minus my down payment.What are the legal ways to do this so that I can buy 2 properties from him, he can sell them, and still use those sale proceeds (along with the sale of the other two duplexes) into a 1031 exchange into a commercial retail property?

Doing things in the right order matters as in most rental markets it would be harder to get good investment returns for example on refinishing hard wood floors for a rental... buyers appreciate/expect refinished floors more than the typical renter... you also would not want to have 5 years of wear on refinished floors to then put it up for sale.Do all that and in 5 years you can still decide to keep it you will likely have massively increased the appraisal value, do a COR and fund your next deal. 

I think I would come close to allowing her out of her lease assuming she funds someone who passes your screening requirements and signing a lease with her replacement.

Go half on a deal, fund a portion if not the whole deal, bring an excellent deal to the table.

This means you have to pay the transfer taxes twice.Some lenders will require you to bring your own funds for the first part of double closing.