Inheritance. Pay off mortgage or invest in rental ?

[Juan Mora]

San Diego CA 

My father passed away a couple of years back and we recently finished distributing his estate. My father left me a $300k condo that I am in the process of selling this spring. 

I don’t know what would be best to do with the money. 

I have a rental property that I purchased back in 2005 for 500k. It started as my primary residence but turned it into a rental 10 years ago. It has a value of 600k and I owe $350k (APR 2.75) on it. Rental income is $2700/month and mortgage is $2800 with 14 years left on it.

I was hoping to find a rental property that made sense either in Arizona or Nevada but I feel the market is due for a reset. 

Should I just pay off the rental and own it fair and square and pocket my rental profit or look for another rental. 

A buddy of mine recommended this site and said I should refinance the full 600k and buy 2-3 properties out of state so I own 4 instead of just 1. 

Thoughts ?

Age 39 

Cash: 160k

Retirement :140K

Salary: 150K