1031 Exchange Question

[Darsh Patel]

Hi Everyone,

I am thinking about doing a 1031 exchange by selling one of my current properties and using the funds to buy a different property. I needed some clarity on a potential scenario... My property that I'm selling will likely go for 130K. I have a mortgage balance of 70K which means my very rough take home from the sale is 60K.

Is it okay for me to use this money as a down payment to purchase a property for 110K? The new house purchase price is lower than my sale price but higher than my net proceeds. I have heard in the past that you need to purchase a property of equal or greater value. Does this mean it has to be more expensive than I sold my property for or than my net proceeds from the sale? 

Appreciate all help!
Darsh