I don't really want to go looking for the financing to pay him his balloon payment.

Now, this would obviously be negatively cash flowing since you would need to pay taxes and insurance.

Get them to give you an idea of what they are paying for party /event space now in Amarillo and if they would sell your venue for you.

I also pay my mortgage for the house I live in.

I used $80k to pay off personal debts and $50k to remodel it by myself with my two hands.

I pay $875 (including principal, interest, taxes, and insurance) and rent it out for $1,625.

Add that to about $25K tax for the depreciation recapture, that would be paying a total of $70K in tax if they do the 1031 exchange. 

The interest rate isn't that huge of a difference between the 15 and 30 so worst case scenario if you have the 30 year option is you start paying it down on a 15 year timeline - sure you'll pay a little more in interest over the 15 years, but it will have been worth it if you bought another house.

Hey @Justin Brown, what @John Underwood said is spot on.SLC has been restricting STRs for a long while now and it isn't going to get better.People who have STRs in areas where they are not allowed are breaking the law and will eventually pay the price.Having said that, you should check and see if there are certain areas where it is allowed in some way and that is why they exist there.

Option 3: Pay large down-payment on modest rent ready house.