Hello Laura, Different lenders might require different things here but most of the time if you can show the lender a signed one year lease agreement that will be sufficient.

You seem to think that JADU's owner-occupancy requirement is a dead end.

I've done some of own research online and in videos but would love some insight from brokers or investors that have done this themselves.

We should be able to pay cash for the entire build given the timeline the build will require.

However, it's important to ensure that all requirements for a valid 1031 exchange are met, including identifying replacement property within 45 days of the sale and completing the exchange within 180 days.I would suggest you get with a real estate focused accountant asap to take care of this.

Many times, people just set the property up and list it online...some even avoid Airbnb if they know the city/county is watching the platform...and then quietly run a STR in a very illegal area.

The IRS requires that you use the unrelated 3rd party qualified intermediary. 

As others have said, these are typical land bank purchases where you buy a house and land and are required to do the renovation and it's always $100-$200k if they are offered from $1 - $5,000.

The title company gave me the contact of a firm they partner with, and requested that we use them instead as they meet their requirements, but they could not provide any explanation of why they can't write the check to the IRS, and I have already paid for the other firm's services and do not want to pay again.

If you do cash out refinance it would allow to only get to 75% LTV around the high 7s with some points, they would still require to be 1st position.