A couple of months ago I would have said to pay off the loan, but today I would lean more towards using that to fund some real estate transactions first. 

@William Hochstedler ,Aren't you going to get an assignment of leases and rents with the close of the transaction?

We started out with "sweat equity" and now focus on 80% brain equity and 20% sweat equity.Our brain equity is dealing with short sales, foreclosures and other more "gruelly" transactions.

Since this would be a purchase transaction Lenders want money down even though sale is well below appraisal. 

Those also led to other sources, attorneys, accountants, trust administrators, hospitals, nursing homes and estate managers.It's unfair to put a note investor or Realtor or contractor dealing in notes in comparison as to size or scope or even as to the latitude of transactions with me, not bragging but I was in a very unique position.

Since the laws and process are different in every state, you and your heir(s) need to determine what specific steps are required in order to complete the transaction that you have or will agree to.

Hi Michael, Yes, you can sell one or more relinquished properties and you can buy one or more replacement properties as part of your 1031 Exchange transaction. 

Perhaps transactional funding will work in this situation, but you need a high level of expertise if you are dealing  with this situation.  

@Kevin Hockaday , beyond the issues of how to achieve the transaction, there is the bigger issue of wholesaling any listed property.  

But if down the road, you plan on flipping properties, and your doing it all through the same LLC, the IRS is now going to consider you a dealer, and if all properties and transactions went through the same LLC, then the dealer status applys to all your transactions regardless.