I’ve been actively looking for SF deals lately and what’s holding me back is the down payment.

I just want to make sure I understand correctly, so even though she will be receiving a lump sum in 3 years from the balloon payment (it is an investment property she's selling me, not primary residence), she can't 1031 that because technically when she sold it to me today she became the bank and no longer owns the property, so basically the lump sum paid to her at the end, is the same as a bank making money and therefore taxed as income tax?

I have a property in Memphis that the property manager has been managing fine for > 5 years and they recently became unresponsive to calls/emails and have missed sending payment to me. 

Purchase price: $260,000 Cash invested: $5,000 This was a short term lease option agreement to help the original owner get back on track with monthly payments and upgrades.

@Kenneth GermannThere is an element of trust in getting business done. 1.

Then buying with 1031 can't be owner occupied with low down payment. 

.= Owner selling the property= Substantial lease violations= History of non-payment of rentThe history of non-payment of rent is conditional and specific as to the details and timeline of non-payment.

Help me figure out if this scenario I thought up has potential to work or not.First Leg:Purchase Price: $500kDown Payment: $100kClosing Costs: $20kLet's say I want to purchase a short term rental at the price point of $500k.

It ended up being a great deal as the sellers divorced and needed money and accepted a small portion of the loan as payment in full.

I am seeking to establish a Land Trust for the purpose of acquiring a property while maintaining anonymity in a creative deal.