HELOC is short term target loan and cash out-- if you want to use funds for longer term. 

Long story short, I'm drawn to a few of the MSAs in North Carolina for a number of reasons: population growth, job growth, climate, taxes, lower acquisition costs, and I'm a Jersey boy so I like the East Coast. 

But it was all geared towards short-term rentals.

From your description, it sounds as if your first architect doesn't believe you are serious about the project.

They're looking at the short-term benefit of "living for free" for as long as they can. 

Need a quote for work on a 2 family property in Guttenberg by Monday (i know... short notice..)Thank you in advance!

15 min by Uber soon to be 2 min by air taxi, in a short few years when the landscape will be drastically different... and we will watch the air taxi window some amazing new parks..... 

Unless He has a proven background in Sales, very few lenders will touch him until he has an established track record.What I would suggest, is ask the relative if they would do an Owner Finance for 3-5 year Balloon Payment, if you are trying to make this happen in the short term.

Typically in my (limited compared to yours) experience most issues come up shortly after moving in.

The IRS considers debt reduction (when not replaced with additional equity in a new prop) to be the same as cash in terms of its benefit to you, so you would be taxed on the $125k you didn't roll over.If you don't want to carry a mortgage on a new property, you could sell, use $125k to pay off your current loan, and then put in an additional $125k of your own cash to make up the difference, resulting in $325k of equity in the new property/properties, and meeting both the equity and total value rules.So the short answer is YES, it is allowed for you to go from a $325k property to a $200k property while paying off your $125k loan, BUT you will pay taxes on the amount you don't roll into the new property ($125k).