Can you 1031 into a cheaper property?

[Julia Taylor]

I talked to a 1031 exchange firm but left the conversation feeling more confused. Can I 1031 into a cheaper property?

We bought a SFH for $400K. We put an additional $65K into it. Realtor expects we can get $550-$575K for the sale. We do have a mortgage on the property, not sure if that matters in this equation.

We are looking to purchase a cheaper property (say, $300K), and put all the proceeds from the sale into it. 

Can you do a 1031 with this type of sale?