Owner financing on a house purchased with a 1031 exchange

[Terri Dyer]

We just sold a house and purchased a replacement house with the 1031 exchange from the sale and about $9,000 cash out of our own pocket.  We would like to either flip the house and then owner finance it (have buyer put $10,000 down).  Or we were thinking about doing a cash out refinance on the property and just renting it.

What would the implications of this be?  Would we lose the 1031 exchange and have to pay capital gains and re-captured depreciation tax if we did a cash out refi or owner financing?