Hitting obstacles, need creative solutions to purchase an office!

[Scott R.]

Hi BP -

Long time listener/reader, first time poster.  Need some help!

I found a building to purchase an office building in PNW for my small business.  Price tag: 2.8M.  My banker at WF requires 10% down (I have that).  I'm qualified for the loan.  With 10% down, my payment would be 14K per month.

I own a rental house in Seattle that I purchased in 2011 for 389K.  It is currently worth 1.2M, give or take, on a 15 year note at 2.875%.  Mortgage is $2400, rent is $3500, cashflow is $750 after property mgt fees.  I owe about 220K own the house, so 900K-1M equity before agent fees and capital gains.

I would LOVE to move the equity in the rental house to support my down payment on the building.  I take calculated risks, but I'm not a gambler and value my sanity.  Putting an extra 900K down on the building would reduce the monthly payment from 14K to 10K, which is much more palatable for me in terms running my business comfortably on a month to month basis for the next 25 years.

I'm running into a barrier: my banker indicated that any money I use for a down payment has to "season" for 6 months in order to qualify for an SBA loan, which means I cannot sell or refinance either my rental or primary home without sitting on the money for 6 months.  Also, I cannot refinance the SBA loan for 36 months.   

There must be a way around this?  Can I 1031 exchange the rental?  Surely someone has encountered this before and navigated the situation.  I'm actually trying to take a more conservative approach, reduce my risk, and the bank is putting obstacles in my way to taking a safer route.  

Much appreciated!

-S