Pay Off Second Home or Leverage into New Property

[Anthony Finelli]

Looking for feedback from folks who have been in similar situations and have lessons learned or advice, as I am just getting started and this is literally my first post.

Wife and I moved out of our first townhouse and rented it out to grow our family 3 years ago. We originally used an FHA loan with 3% down, took on MIP, and now have a $2,100/mo mortgage with $225 HOA/mo - so about break even on cash flow. There is roughly $275k left on the mortgage and its value is est $430k.

We have a brokerage account w $300k that considered as discretionary investments because we also have 401k contributions and emergency savings.

Our options we're reviewing:

1) Do nothing. Let brokerage grow, tenants pay down mortgage, and save up for another property organically (Cons - slow growth, waisting equity// Pros - low risk)

2) Cash out the $300k brokerage account, pay off the townhouse, start cash-flowing $2,400/mo, and save up for new investment or 1031 into multi family(Cons - cap gains tax on cash out, high Oregon income tax penalty, hard to find deals being $2,400 monthly cash flow) // Pros- cash flow, increased leverage into large investment)

3) Cash out $300k brokerage and put into separate Multi Fam property, hoping for $2,400/mo+ cash flow, keep townhouse rented as is (Cons - cap gains tax on cash out, not utilizing equity PROs - increase portfolio value, higher upside with value add or rent increase on new units?)

Looking for a gut check here because my CPA/tax guy is advising against dumping the brokerage account bc taxes, missed upside - but he also admits to not specializing in real estate asset/tax protection strategies.  Any and all comments are welcome thank you!