Tax & Entity Blueprint · 80% Purchase LTV · DSCR Loans in Tennessee — Nashville, Gatlinburg/Pigeon Forge Cabin STR & Memphis Rental Financing
IRC § 1031 Tax-Deferred Exchange + DSCR Debt-Replacement Strategy
Direct Strategy Summary: Combining an IRC § 1031 tax-deferred exchange with non-recourse or LLC-vested DSCR debt allows investors to defer 100% of federal/state capital gains and 25% depreciation recapture while replacing equal-or-greater debt across 1–4 unit bundles or 5–25 unit multifamily replacement properties without DTI bottlenecks.
Equal-or-Greater Debt Rule
100% Mortgage Boot Shield
DSCR replacement debt satisfies IRC § 1031 debt-replacement requirements without W-2 income.
Same-Taxpayer Vesting
Disregarded Single-Member LLC
Relinquished individual title can close in a single-member LLC owned 100% by the exchanger.
Identification Rule Options
3-Property or 200% Rule
Identify up to 3 properties of any value or an unlimited portfolio up to 200% of relinquished value.
Turnkey Closing Speed
14–21 Business Days
Guaranteed certainty of execution inside the strict 180-day statutory deadline.
Step-by-Step Underwriting & Execution Sequence
STEP 01
Engage Qualified Intermediary (QI) Prior to Relinquished Sale
Exchange proceeds must be wired directly to an independent QI escrow—constructive receipt voids the exchange.
STEP 02
Identify Replacement Properties Within 45 Calendar Days
Pre-underwrite DSCR ratios on all 3 identified replacement candidates before Day 45.
STEP 03
Close DSCR Replacement Financing Within 180 Calendar Days
Match taxpayer TIN/disregarded LLC structure and fund equal-or-greater DSCR debt.
Frequently Asked Underwriting Questions
Can I sell one low-yield rental and 1031 exchange into three high-cash-flow DSCR rentals?
Yes. Under the 3-Property Rule or 200% Rule, you can diversify equity from one appreciated property into multiple high-yield DSCR rentals or a single blanket portfolio loan.
What if I sold in my personal name—can I still close the DSCR loan in an LLC?
Yes. A single-member LLC where you are the 100% sole member is treated as a disregarded entity by the IRS, satisfying the 1031 same-taxpayer rule while meeting DSCR LLC vesting requirements.