Sounds like he's treating it as a qualified joint venture. 

Due to the inherent characteristic of this type of siding to deteriorate if not properly maintained and the difficulty in detecting all damaged areas, a qualified siding installer should perform a more in-depth evaluation.

If he does not agree, then offer to prepay the mortgage payment for one more year to extend it.Now, you might need to put in a provision in the refinance clause that IF the property is inherently will not qualify for bank financing (due to title issues, structural issues or any issue for that matter), that you have the right to keep paying the owner finance.

So your strategy is not going to work. 3) You might qualify for partial exclusion(That might shelter your entire gain) if the reason for move is health, work, or unforeseen circumstances.

@Freddy Lleren,  The qualified intermediary for the 1031 exchange does have to be in place before you close the sale of your relinquished property. 

"To buy a new house" wouldn't by it's self be a reason to qualify.

Despite your recent move to NC, you do not yet qualify as a Southerner.It's spelled y'all   ;)

Price is to high to cash flow, you're paying to keep the house2. 3% comissions won't go 100% to you unless you're a broker, also the title company has to send the check to your broker first and then you can pay off the lender of that money (if you borrow the downpayment money from your qualified relatives)3.

I'm also thinking of renting out half my house and hence the mortgage interest (half of it anyway) could be applied to the E vs the A and I might still be better off by then qualifying for the std. deduction.

We will find that perfect duplex, I just hope it falls from grace in time before her school starts in August. :)Thanks all,Elizabeth