That will cover paying off the hard money, closing costs on the new loan, and your pre-paids.

Or just search in forums for "Delayed Financing", lot of content on the subject.I would draw your attention to a few requirements, from the Fannie Mae requirements, to note :The sources of funds for the purchase transaction are documented (such as bank statements, personal loan documents, or a HELOC on another property).The new loan amount can be no more than the actual documented amount of the borrower's initial investment in purchasing the property plus the financing of closing costs, prepaid fees, and points on the new mortgage loan (subject to the maximum LTV, CLTV, and HCLTV ratios for the cash-out transaction based on the current appraised value)Basically ensure funds are purchased in cash by you(has been in your account for over 60 days, HELOC works), your name is on the offer, your name is on the refinance loan and that 70-75% of current ARV at time of refi is equal or near to your invested funds on the HUD.Hope that helps! 

In the scenario you outlined, there are only 2 ways that I can think of right now that they would find out about your misreporting outside of an audit - if this was a commercial client that files 1099s, or if you file a partnership or scorp return and present a balance sheet that includes prepaid rent and is a cash basis return.Cash income is recognized if you have constructive receipt as of the last day of the tax year.

@Kareem Aaron not from your area, but all of the research that I completed reveals there is no statute on prepaid rent.

The max 6% credit cannot exceed the ACTUAL amount of the closing costs and prepaids (prepaids are the initial escrows, 1st year homeowners insurance premium, property tax due if any, and interest until the end of the month).2.

Even deposits and prepaid rent puts you at risk if it's on the settlement statement.The answer is to finish the 1031 with the purchase using all of your 1031 proceeds. 

Dont forget financing costs, closing costs, prepaids, etc etcRoofing costs are VERY high right now. 

If you wish to get a first assessment consider joining a pre-paid legal plan.

If there are any delays in completion ofthe project, Borrower shall notify the Lender in writing via email.This note may be prepaid by the Borrower at any time in whole or in part without premium orpenalty.

You will learn quite a bit, things like setting up a second line, setting up a mailbox, drafting late rent notices, having prepaid mail etc.