Advice: Sell or Hold, if Sell, Best Options with Cash Out

[Kirby Davis]

Hey guys. I have a rather complicated situation, and I'm trying to decide what is the best option forward. I work full-time, W2 employee, strong salary. My husband traveled 250-300 days/year, so almost two years ago we decided to put an end to that. We bought land and built a large agricultural operation that is contracted with a large food producer. It's definitely not passive. It could be, but we made the mistake of hiring a retired family member to manage most of the work, and realizing it was too much for them, my husband works along with them full-time. This cashflows ~ $100k to us annually. (Realistically, we could hire someone to manage it full time and it would be $50k cashflow passively, but the family situation is complicated, so we can't do that at this time.) The tax benefits are also tremendous, as the depreciation covers all of the income from the operation and most of my W2 income. 

We haven't been looking to sell the operation, but we were approached with an offer that would essentially net out a little over $800k to us. Now, we are evaluating whether we should sell or hold the investment, as it does gain good equity ever year, but we are also in an advantageous situation, as getting a contract like we have is very difficult right now due to the current market. In the area we live in, a lot of people buy our type of operation mainly to have it passively managed with minimal cash flow and to use the depreciation to cover other income they have elsewhere. I love the benefits of the depreciation, but we are also at a point where we still need cashflow. 

My question is this: Given the information on how this performs, should we sell? (Could we replace this level of cashflow?) Or should we keep this and continue to build our portfolio with truly passive investments. Once the family issue is resolved - hopefully within the next year - hire someone and cashflow the $50k passively? 

Next, if we do sell, what would be the best options for the $800k? 1031 into something else? If so, what type of investment - we obviously want to maintain strong cashflow and would want the next investment to be passive or to at least be a business investment that required oversight/management but not day-to-day grind. Or, take the cash, pay our taxes, use the rest to pay off every bit of debt we have, then use the ~$200k remaining to start investing completely passively to (hopefully) quickly replace any need for W2 employment going forward. 

Any insight/advice/new ways to look at this is much appreciated!