Puzzle to solve: How do we buy a new house without selling our current one?

[Richard E.]

esteemed listmates

I have some friends who have a real estate problem - but don't know it. 

SITUATION:

They have a great 3 bedroom house in San Rafael, with About $600-700k equity. Bought for around 900, worth at least 1.4 now. Its in an awesome hood and they should never sell it, ever, unless they absolutely have to.

 But, They are outgrowing it. They make together, about 400k a year I would say. 

They want to sell their house and buy a bigger one. I am saying- DONT SELL.

They are saying: BUT we cannot come up with a down payment for the new one unless we sell the old one.

POTENTIAL OPPORTUNITY:

They have a rich RE investor stepmom willing to buy the house they need, in cash (through a 1031) and do some sort of seller carry deal. 1.8mil 4 bd house that would be suitable for them. Terms TBD. 

QUERY: How do they 

-come up w downpayment for the new house without selling old house (I suggested heloc);

-Structure the seller carry in such a way that they would be able to buy and keep the new house without too much worry of not being able to pay later?