If you have the open line you are essentially using it as a bridgeCouple of moving parts here but you do not owe tax until you have a realized gain so I am not sure if I quite understand the last question.  

Your plan to execute the BRRRR approach sounds like a solid strategy! 

@Peter PeterMy understanding both are prohibited transactions.

Pay Attention To Your Credit Score Although we don’t have any income requirements, we do want to know that you are on solid financial footing.

Pay Attention To Your Credit Score Although we don’t have any income requirements, we do want to know that you are on solid financial footing.

It's crucial for all partners to understand the implications of personal guarantees before committing to them.

Reno, on the other hand in the heart of the West, offers a more consistent track record-just what you want for peace of mind in your investments.Key Points:1) Reno is holding its own with solid occupancy rates for multifamily properties.2) Across the West, occupancy is more consistent, and Reno fits right into this pattern.3) For a balanced approach to investment, Reno’s stability is worth considering.For those San Francisco, Sacramento, San Jose, Los Angeles investors looking at the big picture, Reno is a smart choice.Source: Freddie Mac Multifamily 

As a broker in the transaction, you’d want the principal party you represent to sign waivers acknowledging their understanding of the significant risks they’re undertaking.  

Learn more about REI, understand the market around you, then buy deals that match the strategies you want to pursue.

So, I think many investors know enough about the possible issues from their own experience to do some research themselves and then understand the possible risks and are prepared to deal with them.