I completed a 1031 exchange about 18 months ago. See below for details and my question...

Property #1 (numbers rounded to make it easier - not including fees)

-Bought for 75k

-Down Payment 15k

-Sold for 200k

-Mortgage amount at time of sale 50k

Property #2

-Bought for 250k

-No mortgage, but I did a promissory note through a family member for 100k

Initially, I was attempting to mortgage ~100k on the second property. The issue was that the condo is in a building with over 50% non-owner occupiers. I couldn't do conventional lending because of this, and the rates were crappy on the unconventional products. That's when I got the 100k through a family member at a reasonable rate and established the promissory note. Now, it seems like it'll be easier to take a loan out on the property, and I'm interested in taking around 100k out to either pay back my family member or perhaps finance another deal and keep our note intact.

Can I do this without having any tax liability on my 1031 exchange? My understanding is that I have to reinvest my down payment and all profits from Property #1 into Property #2 (which is 15k+125k=140k). Then I need to replace at least 60k in debt from the mortgage payoff from Property #1 (mortgage amount at the time of sale). My understanding is I could take up to 110k "out" of this property right now without any tax liability. Does anyone see a problem with this? Thank you!