The house is worth at “quick sale” about $360,000.  

A lot of our housing stock here has finished basements or in-law suites, so with something like that you can generate significant rental income for an inexpensive conversion. 

Ignore seller finance for a second...Can you buy a house, put 20% down...yes.

I would like to sell a couple properties in the future, would I be able to use the 1031 strategy to buy one house that I would use as a primary residence?

On a positive note we did build a new house to the specifications of a specific tenant. 

Purchase price: $1,300,000 Cash invested: $130,000 Sale price: $1,650,000 We work with an investor who purchases the house and secures a deed in his name.

There will likely be a partnership return required where you flipped a house with a partner and lost $120,000.If you sold the other property within the same partnership, it will also be reported on that partnership return.The net result to you is that you will receive a K-1 showing your income / loss which you then use to report on your individual return.If you made no money within the same year, you likely pay no additional taxes / get no additional refund.Best of luck.

I have lived in Austin for almost 20 years where I own one house that has been my primary residence for four years now. 

I ended up closing on a duplex house this week with the intent to rehab the whole place.

Christmas on the house.