You cannot 1031 into properties you already own or to pay down a  loan on a property you own.You're lender is probably giving you a partial release when you sell in exchange for a certain % of the net proceeds from the sale of the one unit.While it is conceivable that you could do a 1031 on this sale I think you need to look closely at the issue of intent.  1031 is only available for properties you have purchased with the intent of holding for productive use. 

@Nat Chan price point is low for a quality area with high rent.

@Cecilia Arnulphi ah, so the 203K loan is an FHA loan product. 

It's tough to get quality property management that actually cares for deals smaller than that and for it to make sense from a cash flow perspective. 

He has good pricing and the quality of work is good also.Thanks,Cliff

@Melissa Paul I am not sure if I responded but I stop using them as the data quality started to rapidly deteriorate..

Utilities were included and also household supplies (paper products, laundry products, cleaning supplies).

We then takeover after closing to do the make-ready (if needed) and get the property leased to a quality tenant. 

Maintenence implies the day to day costs are higher, that really depends on the quality, age, structure and previous upkeep.

Prior landlords are more of mixed quality data bag.