1031 into another property we own by paying off promissory note?

[Steve K.]

Just read another post that got me thinking... didn’t want to hijack her post so starting a new one: We’re looking to sell a Quadplex later this year and expect to have some capital gains. We own another similar quad down the street, with seller financing in place which has a balloon payment coming due. We were thinking of using the proceeds from the sale to pay off the other building. Would we be able to 1031 profits from the sale into the other quad? We hold title with a promissory note held by the previous owner.