This community has been great and exactly what I need support wise.

I rented for 40 years, saved up to buy a duplex, and a couple years later, all the rules were flipped on their heads and the rug pulled out from under me.  

I realize that a lot of your region has had great appreciation but I think you're still allowed up to $500K tax free if you meet the 3/5 occupancy rule.

The first rule of real estate investing (ok maybe not the first) is that paying down a mortgage does not increase cash flow it buy's cash flow.

I have slightly different rent amounts so I know who has paid and I get  them to put property address on bottom of deposit slip.You may feel uneasy about giving them your bank account number but you give out your number everytime you write someone a check.I also have starting using Zelle which is supported by the major banks.

The comps for most of them don't seem to support the purchase price and they often still need some upgrades.

Another challenge with Dallas is the 2.72% sales tax...impacts cash flow greatly, plus the rents aren't high enough to support the purchase.I'll keep on truckin' along searching in both markets (Seattle and Dallas) and adjust my strategy for seeking out deals.

Since comps still support your asking price, you may be in a good spot.

May I pay down the replacement property further- just want to be sure that I follow the 1031 rules without a boot?

The house was built in 1960, so when it was put it, there were probably not rules against it.