Using a 1031 Exchange with a mortgage

[Robert Leonard]

Here's the scenario.  If I have $100k to exchange.  I want to buy a $200k property for $125k.  It expect about $25k of repairs & other costs.  I want to transfer the whole $100k "into" the property.  I want to borrow $50k at the time of purchase as a new first lien on the property to cover the balance owed and the repairs.  Is there anything in the rules that will not allow me to borrow against the property in excess of the balance of the purchase amount?  Is there any kind of requirement that would make me have to use a separate transaction or some other delay of time before I can access the equity by borrowing against it?

Otherwise, I could just get a loan for $30k and exchange only $70k into the property and use the remaining $30k for the purchase and repairs.  I understand that the $30k that would not be exchanged would be subject to capital gains taxes, so it would be reduced by the taxes of about $5k.  I'm sticking to simple numbers to focus on the rules for a minute.

I guess writing that out helped me get to my question: is there anything in the rules that would not allow me to borrow more than the purchase amount in a transaction that is partially paid for with a tax deferred exchange?