Keep or sell 2 primary residences?!

[John Marlin]

Help me analyze my deals! My fiancé and I are considering selling our current primary residence in 9 months (after we hit the 2 year mark), and also our last primary residence. Only considering because we could sell both tax-free being primaries 2 of last 5 years, and expenses are going up on both, and we may be able to get better returns elsewhere. However, both are great homes in desirable parts of town. Details...

Home #1. Basis is $130k, plus $50k HELOC (used to fund Home #2 rehab), and could sell for almost $300k, netting us let's say $110k. Our total payment with the HELOC is roughly $1500/mo, and the home is renting for $2000/mo. However, my loan was an ARM, and is currently at 5.5%, but will be resetting within the next year to market rate. I was also notified insurance is almost doubling... I will also have a hard time refinancing, because I am 1099 self-employed (full-time musician). So our cash-flow will be next to none in the near future.

Home #2 (our current house). Basis is $180k, and could sell for likely $340k. we fixed up the home with HELOC on home #1 mentioned. So we could net likely $150k. Our payment is near $1800/mo at 6.175%, and the home could rent for $2500 if we went that route. However, our ins/taxes are increasing, and our payment would go up as soon as we lifted the homestead exemption as well. Another reason for potentially selling this home, is that my fiancé didn't qualify for a HELOC on this home (house is in her name), and our equity is tied up.

Overall, we love these homes and would love to keep them, but holding costs here in TX are expensive. We want to know if it's better if we take advantage of this window to sell them tax-free and net close to $250k. I also am a Realtor and can save us expenses on that end. We are 29 and 30 years old, and want to set ourselves up as best we can for financial freedom in the next decade and want to know the opportunity cost of keeping these. The downside of selling will also be that our expenses will go up by buying a new home as well, and we aren't very high income earners (we both make a little over $100k/year combined)

We also own a few small rental properties in smaller towns nearby in TX, so the rental game isn't new to us! Help us figure the right path forward!

THANK YOU GUYS!