1031 and a HELOC

[Alex T.]

There are some companies that allow HELOCs on investment properties. Likewise, a primary residence with a HELOC on it can become an investment property in the eyes of IRS if the owner did not reside in it for long enough. So what happens if part of the equity is already invested into another property (i.e. cash purchase) at the time of the sale? Can 1031 be rolled into a previous purchase? Would the HELOC portion be ineligible for 1031? Would the owner be required to pay off the HELOC prior to the sale?