At the moment I am already in contract to sell a property and I heard from someone today that I should have sold the property under the 1031 exchange, is that true?

This is not a hobby it is a business governed by state law and legal contracts.

What I was thinking is some kind of deal where we pay more but then they give us that extra in cash at closing (some sort of contract drawn up prior). 

Don't enter into contracts with no guarantee that you can fulfill your obligations. 

Hey yall, do we have any RE agents here that regularly wholesale properties?  What's the correct way to do this?  PM me if you'd like or post here!Thank you!

No Ma'am A GAR forms you would write the contract on are assignable. 

We initially signed a contract for asking price on the property and I subsequently asked for $20k break on the price based on the inspection results, which I thought was a fair ask and the seller signed the addendum accordingly.Now the seller is asking me for another $6k to cover costs of heating unit replacements (after further inspections done by the seller as required by the city) since the units are over 50 years old and cannot be brought up to city inspection requirements.

I️ assigned a property to an end-buyer, and he signed a contract to pay a $750 non refundable earnest money deposit.

We initially signed a contract for asking price on the property and I subsequently asked for $20k break on the price based on the inspection results, which I thought was a fair ask and the seller signed the addendum accordingly.Now the seller is asking me for another $6k to cover costs of heating unit replacements (after further inspections done by the seller as required by the city) since the units are over 50 years old and cannot be brought up to city inspection requirements.

It kept going on and off of the auction site saying under contract and I didn't want to play with them so I just waited to see if it would sell.