I'm trying to scale back a bit and simplify my life. I'm 53 and have a few properties but need a little help deciding what's next. I currently own and run a wedding venue and vacation rental on the central coast of California. It's a historic property on 10 acres that we've owned for about 10 years. Since buying it in 2014 we have put a significant amount of work into it and we have gained quite a bit of equity with the market going up. We're thinking of possibly selling soon as our son will be off to college next year. My question is this: Should we sell and pay the taxes (probably about $900k according to my CPA) and take the rest and pay off 2 other properties and live off the rents/ invest the rest in index funds or something similar. I realize its a huge tax hit but I'm not super excited about owning more properties with maintenance, Etc. I’ve been very hands on and can do most repairs and maintenance but thinking about making it easier moving forward. I’d like to keep the other 2 rental properties.

Here's the numbers, maybe you guys can give me some good advice.

Property 1: Wedding venue/ Vacation rental. we also live onsite in a small cottage. Property is worth probably $4.5-5 million. Mortgage is $700k. Interest rate is 5.75% fixed

Property 2: 2 single family homes on 1 lot in Hawaii. Monthly rents are $6100 combined. Mortgage is $409k @ 4.75% fixed. Property value is approx. $1.4 mil.

Property 3: 2 cabins on 1 lot in Lake Tahoe. Monthly rents are approx $4500 combined. Rents vary because 1 house is a vacation rental. Mortgage is $430k @ 3.125% fixed. Property value is approx. $900k

If we sell, we would need to buy another primary residence. I like the idea of selling the wedding venue, paying the tax and walking away with a chunk of money to pay off the other rentals. If we sell for $4.5 mil. after broker fees and the mortgage we could walk away with about $3.5 mil. If we pay the tax (approx $900k) we then have $2.65 mil. We could then pay off the two rental property mortgages ($839k) and then have $1.8 mil. If we bought a new primary with cash at say $1 mil we could still have money to put into index funds or something.

I realize it's leaving money on the table by not leveraging all of the sale into more rentals but being in California it's pretty tough to pencil out rental returns to have good cash flow. I could go out of state to buy but not really excited about that. It also doesn't really simplify my life if I exchange into more rentals. Any thoughts appreciated

Thanks..

Santa Barbara, California

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