Nevertheless, in an appropriate case, “the appointment of a trustee is a power which is critical for the Court to exercise in order to preserve the integrity of the bankruptcy process and to ensure that the interests of creditors are preserved. 

However, as you pointed out, withdrawing from the trust could potentially trigger higher taxes since it might be categorized as income, and there's that $60k chunk you need to withdraw regardless.As you're hoping to make your first property purchase before the year wraps up, timing becomes a critical factor.

The sky is the limit as far as what you can include and how to structure it, so make sure you have an attorney with a lot of RE experience so they can guide you and help avoid any critical omissions.

If you're a single mom with student loans, a car payment, and living paycheck-to-paycheck, then $20,000 would be devastating and a reserve is critical.

If they are a secure spoke in my cash flow wheel its critical. so if it's not meant to be insulting I wont let that get in the way.

. $900/mo could be the difference between survival and bankruptcy (they need the cashflow to cover that capex NOW; they can't wait several years for the property to appreciate, so adequate cashflow is critical) ...but a more experienced investor with a net worth of $10 mil can easily survive that unexpected capex of $25k, and to them, whether the property cashflows $100 or $900/mo might be trivial if the property is appreciating well..Of course, appreciation isn't guaranteed, and real estate can (and does) depreciate in some markets... also, in today's market, it would be very difficult to get a typical single family (or even some small multifams) to cashflow at $1k/mo as an LTR....and then there's the important matter of taxation...all of these are additional factors you'll want to educate yourself on...There are a LOT of moving pieces to consider in REI.Good luck out there!

The states where homeowners facing possible foreclosure were critically underwater were: Mississippi (12%), District of Columbia (11%), Louisiana (10%), West Virginia (10%), Illinois (7%), and Maryland/North Dakota/Missouri/Indiana/Kansas, all with 6%.

Any suggestions/criticism/responses are much appreciated.

This is critical in making sure you are buying the right note going to the auction.

This way you get 1 up and going you can rent out to start cash flowing while you work on the others.The right contractor is critical especially when hard money is used because of the carrying costs.