The seller must trade equal or up in value, invest all equity from the sale and replace the debt, follow specific deadlines, enlist the help of a Qualified Intermediary to provide advice, prepare 1031 Exchange documents, and also hold the funds from the sale.

I like this as a future strategy so hopefully a qualified intermediary on 1031 can give you general information!

But you'll pay tax on the difference.In order to do a 1031 exchange you must use the services of an unrelated 3rd party called the qualified intermediary whose only job is the administration of the 1031. 

We sold a property and our cash is being held by an intermediary (referred to as "1st Sale").

Maybe speak with a Qualified Intermediary now, before you set up the structure. 

The QI (Qualified Intermediary) creates an entity to take control of the new property and then when the first property sells, those funds buy it from that entity essentially.Find a QI and they can answer all the details about the process and help you run through some different scenarios so you can plan it out.

Basically, you sell the property to the intermediary and receive a note with a 30-year term and interest only monthly payments to an escrow account with a balloon payment at the end of the 30 years.  

Even getting aQualified Intermediary to help with a §1031 deferral.

it is clearly possible, but I would also be certain the GP has done this before, because there can be hurdles that if not handled correctly, have the potential to disqualify the 1031, creating a tax event.Lastly, I will reiterate that I am not an attorney, CPA, qualified intermediary, or anything of the like.  

Anytime there is an intermediary, such as a broker, affiliate, or another party involved, who obtains their money by selling their loans, you’ll have no idea who your ultimate lender is.