Yes, I live in Montgomery County and have another rental in the same neighborhood that I purchased through a 1031 Exchange.

From our exchange of messages the guest booked with possibility of canceling to begin with.

What the servicer will do is figure out how much they can squeeze out of the borrower in exchange for kicking the can down the road.  

You can do this through a 1031 exchange and still defer your gains. 

As for the family project, if you’re okay with a smaller return in exchange for long-term value, it’s worth considering.

I'd do a 1031 exchange and defer capital gains.

Investment Info: Multi-family residential buy & hold investment located a 20-mile drive or 25-minute ferry ride from downtown Boston in the beach town of Hull, Massachusetts, also known as Nantasket Beach.Purchase price: $550,000 in 2016Cash invested: $137,500 from 1031 exchange (75% mortgage)A 14-unit property on a corner lot, and it includes an adjacent lot as well (10,000 sq ft total lot size, double the town median lot size), giving an exceptionally large patio, yard, parking areas front and back, and a storage shed.

This will incentivize me to sell and buy a better, more expensive property (1031 exchange.)

Another common route is borrowing from private lenders—whether friends, family, or other investors in exchange for a return on their investment, though you should always ensure everything is clearly agreed upon in writing.If you're hesitant to use your savings, a HELOC or hard money loan might be your best bet for accessing the capital you need without dipping into your reserves.

I understand the cash situation, so maybe this becomes a stacking/1031 Exchange play.