I would also share pros and cons of paying taxes on the windfall versus owner carry.

Because you won’t owe anything, and because I ASSUME you aren’t going to bother trying to go after them legally.

Consider using an FHA loan to secure a 1–4 unit property with just 3.5% down and take advantage of tax benefits by living there for at least two years.

Honest... not great but we had other tax reasons to get into them.   

For context, I'm based in the SF Bay Area in CA and looking into buying my first OOS rental after house hacking locally for 10 years.

We give users the ability to edit a post for 10 minutes after posting for those situations where you say something that you realize upon review needs a tweak.  

jumping in this thread after 3 yrs.

Any tax pro who is familiar with REI will be able to help you.

If while asking the questions the loan officer says that the sub to property that you are getting ready to buy would become an issue then just close on the sub to property after you close on your refinance. 

What can be done or does anyone have any experience using a VA loan after separating recently?