How to 1031 exchange owner/seller financing

[Josh Springer]

Hey all! I'm an investor myself (newer), but have some leads on properties where seller financing (free and clear) will be an option.

In total, roughly 90 units split between a few old-school investors that own all of them free-and-clear and all properties have been fully depreciated. In most cases, they're all at an age where they want to become more hands-off, and want to finance to maintain some passive income. Their plans are to liquidate their rental portfolios over the next few years.

One person, however, is interested in staying in the game, but wants to change his focus from MFH to SFH over time as well. I'm aware of most of the benefits obviously from my side and some from the seller's perspective.

The question I have: Are there ways to 1031 from properties sold via seller financing? I've looked for some resources, but haven't found anything other than general statements. I'm trying to figure out the real benefits from a tax perspective. As far as I can see, they're taking the hit over a longer period of time (and making additional gains on the interest), but not sure if they can defer those gains into another property.