Halfway to goals...how to get the rest of the way there?

[Jason Turgeon]

tl;dr - I'm looking for specific investment ideas on how to get the rest of the way to quitting my day job. NOT looking for advice like "spend less money" or "move to a cheaper town" or anything like that. 

My goal is to turn $300k of equity in my current rental property and whatever I can tap into from my primary residence into $4500 net cash flow/month and $460k total cash out for debt paydown and other projects. Would like to do this in less than 5 years.

We live in Boston, willing to invest anywhere.

With minimal fluff, here's our situation:

• Wife has a day job she likes. It covers benefits, etc. and gives us a comfortable base income.
• I have a day job I don't like, I want to quit but don't want to take a lifestyle hit. I like money! I take home about $65k per year. This is the income I'm trying to replace. This can come from passive income boosts or by paying down debt, or some combination of both.
• I have about $210k in debt with about $1725 of monthly paments. I would like to pay it all off.
• Stretch goal: I would like another $250k in cash to improve my current residence (I bought a money pit, and Boston contractors are 5x what they cost in the midwest).

Assets and liabilities:

• We have 2 x 2-family houses. House 1 we lived in until 2 years ago. 
  • It nets us about $10k a year but has over $300k in equity tied up in it (value is about $650k, owe about $350k)
  • We can sell it now and pull out about $160k from our equity without capital gains taxes, and use the remaining $140k in a 1031 exchange.
  • I'm sentimentally attached to the house, it's walking distance for easy management, and we have great tenants. If I don't have to sell I would consider keeping it. But I'm resigned to selling.
• House 2 we live in one unit and rent the other. 
  • Tenants pay $3000 a month, which covers most of our PITI (about $4k).
  • Value at last bank appraisal was $1.2M, mortgage is $630k, HELOC is $125k for a total of $755k (about 63% LTV).
• About $20k in available cash, but I try not to touch that (emergency funds, etc.)
• No credit card debt.
• We are credit card churners. I have about $200k of available credit if I want to get myself in trouble (aka "see a great opportunity")
• I pay $400 a month on about $36k of student loan debt. 
• HELOC is for $125k
  • Currently owe about $115k, about $10k available
  • HELOC payment currently $300/month but will go up to about $600 a month (interest only) after promo period ends in a year.
• I pay $400 a month for my car payment. Don't judge me, it's a long story and I like my new sprinter van after decades of driving sh*&boxes. Owe about $19k to pay it off.
• I borrowed from my retirement account and pay $325 on that debt. I owe about $40k. 
• I have a real estate license and occasionally make a commission, but it's not reliable. That money goes to the money pit or debt paydown.

I was probably 2 years away from being able to quit my day job after we bought property #2. But the rehab on our current residence went wildly over budget (1840s house coupled with insane Boston-specific issues getting contractors) and then we had a little accident (my beautiful 1-year-old son) and between the HELOC payment to cover the overage on the rehab and the extra $1500+ we're spending on the kid's childcare, college savings, and plastic kid crap I am now much farther away.

And no, we're not moving. I live in an amazing 1840s Greek Revival with a barn AND a carriage house and parking but I can still walk to the subway and I'm a $10 Uber from world class entertainment, and we're 1.5 miles from my wife's dream job.

So here we are:

I bring in ~$5400/month in wages + ~$800/month in rental income from the pure rental property. I send out ~$1725 in debt service payments (after the HELOC increase) on ~$210k of debt. I have ~$300k in equity I can access if I sell the rental (losing $800/mo in income), but I can only use about $160k on debt paydown. I want to pay off the whole $210k, get enough extra to pay for $250k in improvements to my residence/rental property, and still net about $4500 a month in income. And I want to do this in 5 years or less.

How would you manage to take my $300k nest egg and do what I want with it? I have some ideas, but I am looking for stuff I haven't thought of. Where in the country would you invest? Would you go with multis or SFHs, and why? Would you pay down debt first, or invest first and pay down debt later?