I am generally in camp "seldom sell", but in this case my vote is to liquidate.

Speaking of loans... how much $$$ do you have liquid, what's your budget, and what neighborhoods do you want to buy in?

Here is the how I would explain it to a kindergartner:The true power of a 1031 exchange is the ability for an investor to meet their investment objectives without losing equity to taxation.With more money they can buy larger, multiple, or more productive properties.What is the alternative?

Without adding creativity like: room by room renting/padsplit, value add/larger cash down, mid-term or short term renting, etc it's just how things are.  

That all said to me its zero debt on anything other than a larger projects but for rental houses and smaller investments its zero debt..

Quote from @Caleb Brown:  You could see about being creative and doing a seller financed deal but again with no liquid cash you wouldn't have a DPThanks Caleb, I inquired about a seller finance deal but she isn't interested and just wants out completely.I appreciate the input

@Jeff ShaverIt's good to see a fellow San Diegan on here.If your goal is higher monthly cash flow, transitioning to larger assets with better economies of scale (like multifamily) could make sense.

However, a larger home may consider another can or two in certain locations based on proximity to the kitchen or bathroom.

Go over and see if you can put liquid plumber or something in it to clear it....take a snake and plunger just in case.

Liquidating the property is by far your best bet.