most lenders will not allow this or legally recognize the second.

You have three potential challenges:1) Most banks & credit unions won't put their HELOC, or any 2nd mortgage, behind owner-financing.2) Same lenders won't recognize the equity difference between purchase price & appraised value for at least 6-12 months.

There’s no required holding period as an STR after that.So if you buy in Q3/Q4, materially participate (100+ hours, more than anyone else), make it available for rent, and actually have some bookings, the IRS generally recognizes it as an active STR for that year.

California does not recognize series LLCs.

Since  the alternative is to recognize the gain and pay off the tax back to the first 1031. 

As savvy investors are adept at maximizing leverage to boost investment activity, be sure to partner with a lending platform that champions borrower liquidity.

As savvy investors are adept at maximizing leverage to boost investment activity, be sure to partner with a lending platform that champions borrower liquidity.

I recognize I'm not offering the answer you are hoping for but being in the right doesn't always mean it's worth the expense of pursuing a claim. 

Furthermore, you want to know whether the state recognizes bonus depreciationSince you are a resident of California, you want to understand how having an LLC subjects you to the $800 annual Fee.Best of luck to you in your search.

@Dave Foster knows 1031 way better than I do but if I am correct in my interpretation1) you likely do not need the 1031because you can exempt $250k of gains because it was lived in for 2 of 5 years2) if it has not been a rental it does not qualify for 1031 If something I stated is incorrect, Dave can enlighten both of us.As to your dilemma, first recognize the advantages of the 2 of 5 year rule and that it vanishes if rented 3 years.