A noteworthy tax loophole, particularly beneficial for those yet to attain Real Estate Professional Status, offers a strategic approach to potentially offsetting OR EVEN ELIMINATING the impact of high job-related taxes.At its core, this tax loophole revolves around discerning between passive and non-passive activities within the realm of rentals.

That's where the active businesses that have higher cashflow come into play (flipping/wholesaling/etc).Happy to chat via DM if you want to expand on this.Hope this helps!

If you are taking a deal subject to at 80% of the value - in your mind you might see $40k in equity - where as your lender sees none.

After getting educated, it depends on whether they want to be passive or active.

If it was truly plug and play and minimum hours like she states I wouldn’t mind but it’s totally not the case.

Just be mindful that the 401K distribution will be subject to A) Federal TaxesB) 10% PenaltyC) State TaxesIt may be more advised to take a 401K distribution in a year where you are not making as much money as your overall taxes might be lower.The question you have, is will the return on the real estate that you purchase, out weight the return that you will get in the stock market that it is invested in?

Or, you might take a more "active" investing strategy by looking at sectors, which can be good, especially if you've got a finger on the pulse for market trends.

I’m looking to purchase for something in the 300-400k, ideally not too far from where I live so I can drive there if needed.Ideally I want a multi-family or a small apartment building.I don’t mind fixing things up and would actually like that.

My wife and I are actively looking to purchase beachfront property (or “across the street from beachfront”) in Gulf Shores, AL.

The other half would like to some how keep the existing property, convert it into a rental perhaps, and utilize the equity on that home for the downpayment.Question: I was wondering if any of you would mind sharing your thoughts on how you might handle this situation?