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?

Most likely you will be in front of the judge (technically it might not even be a judge) for about 90 seconds and then you'll get an order dismissing you from the case.Feel free to DM me with any additional questions. 

I’m not technical and don’t plan to.  

Now, this still technically violates the due-on-sale clause, but it isn't likely to arouse suspicion. 

Now, this next part is technical but important: When you work with a QI, you also want to make sure that the personal residence portion is specifically excluded out of your Exchange Agreement and the Assignment of Contract to the QI, and there should be separate settlement statements for each side of the transaction.

While technically you can do it yourself, you would never get title insurance so you could never sell or finance the property.

Technical point: While you will technically incur "mortgage boot" by not replacing the debt in your new property, using another cash source to replace your debt gives you a "boot offset"; meaning you won't incur tax on the mortgage boot by doing this. 

I have a property under contract with my LLC entity, so technically, it's my LLC purchasing, not me.  

Technically I can say that I moved in, after all I have the key and they each only rent a room. 

This leak was really quite a minor issue from a technical standpoint.Which, in turn, is the thing about this thread that I found troublesome.