So, I don't think you can pull it off unless you're in full on scam mode.

(The wording of your post sounds like doing a 1031 after the sale; I may be inferring to much, but I've encountered this misconception way too many times and would be glad to spare you from any tax surprises.)1031 is intended for property held for investment, not property held for sale.

But the lender was just scamming me.

I would bet 95% chance of this being a scam.  5% is way way way to cheap for a private lender unless its a close family friend or something like that. 

Praise ignorance, for what manhas not encountered he has not destroyed.Ask the questions that have no answers.Invest in the millennium.

The emotional animals are a total scam, IMO.

I am in the process of setting up my own series LLC and have encountered several challenges.

If you can sell it to cover that and make yourself the profit you need to compensate for all the headaches that you'll have had encountered, then do it. 

Through my research I’ve encountered many OOS investors located here in the front range who went that direction and literally all of them except one experienced frustration and near total capital loss, not gain and certainly not any “passive” income so I would not recommend going that direction unless you have a brother or blood brother or someone you trust on that level who is skilled in real estate in an out of state market willing to help you find properties and manage them for you.

Despite common statements to the effect "we don't do that", I have never encountered a bank with a formal policy (written) against selling their loans.