1031 Exchange Protocol

[Account Closed]

A few days after Christmas, a potential client called in hopes that I could help with his situation.  He shared the following circumstances.  I hope there is something I can do differently next time to help in the future.

He told me that his mother-in-law was to be admitted to a retirement home and that he owned the home she was currently living in. While she did pay rent, he did not wish to keep the rental in his portfolio, and instead, wanted to 1031 exchange it into a property closer to his home. When asked about this property, he said he was going to use his HELOC to purchase a rental across the street from him, and that closing was schedule for later that day.

His question was, Could he still perform a 1031 Exchange, or Reverse 1031 Exchange, given these circumstances?  What are the protocols for doing a 1031 Exchange?  Is it ever too late?

As I am not a QI, I directed him to a QI close to him, to ask questions and seek council.  While he closed on the property across the street from his primary residence, he still has not listed the rental home that was occupied by his mother-in-law.