@Alex Todd, yep, you would qualify for both as long as you sell next year in time.So then the question comes down to - If you're going to make the same amount of money either way would you prefer to sell now and 1031 (but eliminate the risk of another year holding). 

Option 1:30 Year FixedLoan Amount $202,500.00LTV 75%Discount Points %0.00Prepayment Penalty (3/2/1)Interest Rate % 8.225Origination Fee % 0.00Underwriting Fee $1,645.00Monthly Mortgage Payments $2,018.76Broker Fee % 1.25Cash From Borrower $78,081.01Option 2:5/6 ARMLoan Amount $202,500.00LTV 75%Discount Points %0.00Prepayment Penalty (3/2/1)Interest Rate % 8.025Origination Fee % 0.00Underwriting Fee $1,645.00Monthly Mortgage Payments $1,990.40Broker Fee % 1.25Cash From Borrower $78,052.65I'm not sure what credit score is being used to qualify BUT this looks to be inline with the current market rates for a 75% LTV cash out on an invest property.

As long as you qualify for the loan independently of the funds used as the GAP funding, most lenders shouldn't have an issue.

Because if a tenant gets an eviction on their record they will have a hard time being able to qualify for another rental.

Your first new build will be hard to qualify for.

Qualified demand that is, I think real demand is a ton higher.

Everyone knows it's hard to qualify for a loan, but with DSCR it's easy! 

To the point that even though I would qualify as a foreclosure consultant I no longer do this...

That may qualify you for an increase in cost basis? 

If the property is over $100k value, and the loan ask is over $75k you can qualify for a DSCR loan with no seasoning required as long as you put $10k in rehab.