Then each of them could decide to do a 1031 exchange, where they could take their share of the sale, and defer it into another property.

A DSCR loan will be based on the rents of the property vs the mortgage and does not take into account your personal income and debts.A vacation home loan will require that your personal income is enough to support the home and other mortgages or debt you have. 

The VA loan is the greatest loan product available and can be an incredible way to start your RE journey (that is what I did personally). 

Pros and cons of each decision, what worked for you guys, how you made the decision or any other relevant information you have to share regarding the matter. 

I'd appreciate any insights or experiences you can share!

I can't imagine you force the person under the wrap to sell, that seems unlikely.

Remember, building a relationship takes time, and showing genuine interest in your neighbor as a person can lead to a more fruitful conversation down the line. 

I can overcome Due on sale clause, I can over come debt-to-incomve ratio, I can create a LP to share equity with lender.

So you would have to get a commercial loan if going straight to the LLC - which usually has worse terms (shorter rate lock period, shorter amortization schedule).USUALLY, you can borrow personally and then deed it to the LLC after the fact and as long as the LLC is owned by the borrower you won’t trigger a due on sales clause.  

I can share a spreadsheet from what I purchased and the labor charges.