No income No doc.They will release the funds in draws as you complete the project Phases. 

That's $20,293 per year in "income" I will have to declare. - Depending on appreciation, I will be underwater for at least a decade in this "deal".

Since we would be using the money in the same manner could we use a 1031 exchange to defer the gain income tax ?

Any gain on property you hold for less then 12 months will be considered income. 

We all know that generally passive activity losses can only be used to offset passive activity income, BUT, if if the project/investment is completely closed out and final K-1 generated with a loss, in that case can that loss be used to offset regular W-2 income ? 

If it is to play it safe and have a feel for the type of actual operating income that the property can produce before you put debt on it, that's a safe and solid idea.The good news, however, is that you're likely going to be purchasing a furnished property.

I am trying to get an asset based loan my fiance and I don't have the best W2 incomes but we have enough assets to foot the bill. 

It boasts one of the highest per capita incomes in the state paired with one of the largest growth percentages within 100 miles.

We currently live off of her income from her W2 while getting her company off the ground.

Perfect passive income play, but we relocated overseas.Problem: How can we amplify the reach and attract savvy investors?