How much cash or collateral at 65% do you have?

Whatever it is must be a good one because there is a ton of collateral damage being created.

All states have penalties for filing false liens and a mortage is lien.Filing a mortage or deed of trust as a security instrument for a debt that was never consumated or truly perfected is a form of real estate fraud.A sham transaction, is a transaction that is accomplished where the usual intent and purpose of such transaction is not intended to be accomplished and the the intent is to achieve some other purpose or provide a benefit to the parties, usually accomplished between related parties.The IRS may deem a a transaction as a sham transaction under certain circumstances where a tax benefit is accomplished between related parties that would not have existed unless the transaction had taken place.Now, if you have an LLC and there is a good business reason to convey title or equity from a property held in another entity, with related parties, and the purpose for such transfer is convencing, then that transfer may be allowed even if there are collateral benefits.

Check with your accountant to make sure this meets 1031 requirements.  10% SBA collateral, take cash out when you trf from the local Construction loan to the SBA loan.9. 

but my return question is, what's your collateral? 

The lender dropped the home as collateral about a year ago and sued them personally.

I believe I have it handled with a smaller personal loan, using one duplex as collateral, from my regular bank for the down payment needed to do a traditional, fixed rate (low cost) 30 year mortgage on the new property.

Perhaps put up other collateral (cross collateralization), offer personal guarantee (which is only worth something if you have other assets), etc.

Gotta love how a bank will lend to a fast food cashier before you, the guy who owns a 600k property outright and offers 1/2 of it as collateral.  

Ma simple loan with the rental property as the collateral.