Seeking guidance from veteran investors

[Rob Scarry]

Mid-late 40's, NOT a real estate professional, and currently live in Germany. My wife and I have worked extremely hard and budgeted for years with the goals of paying off properties one at a time as we acquire them. Currently we own two homes. One home in Colorado that that could sell for $500k, and one in California can sell for $250k. As it stands today (after taxes/expenses) we are clearing $3400 per month on both homes. The current plan is to find a new home to purchase and continue to pay down the principal as we've done with the other two. Conservatively speaking, should $750k in equity be giving me more than the $3400 per month we are clearing today?

Full disclosure - My wife and I don't have a real appetite for risk. We don't live extravagantly, and focus on paying down principal. So far it has worked for us, and we are collecting rents while property values appreciate. However, now I wonder if our equity is working for us appropriately. When I discuss my situation with friends I get a mixed bag of opinions on what to do next.

One opinion is to just keep up what we are doing - put monthly income towards acquiring the next SF rental. Currently we are targeting Huntsville AL, but recently it seems prices are creeping up outside of range for best ROI. Not sure if there is a better location.

Another idea was to sell the Colorado home and use a 1031 to purchase two separate SF homes for ~ $250k each.

Finally, I have one friend who owns three separate 6-plex units to sell it all and get into a large apartment complex and get a loan. The fear I have living in Germany is to get into a deal like this being so far away.

I appreciate any ideas/advise that leans to my conservative side while allowing me to substantially increase ROI.

Thanks!

Bob