Have you raised your rents each renewal cycle to at least kept up with the inflation of your variable costs of taxes and property insurance?  

You can certainly raise money but I wouldn't recommend this for out of state investments as your post suggests.

So I’ve since blocked off the third floor on one side and rented it as a 1 BR for now. but when the other side leaves eventually I’m starting to lean towards raising the ground grade 28” so that the total drop is less than 20’and then I’ll knock down some walls and make the whole 3rd floor attached only to that last unit so that the whole area can use the stairs and that window as second egress. 

I think super detailed stuff like tax law is interesting, and I have plenty of experience with 1031s and SFR investing, but a Turnkey operator on a forum shouldn't be your tax advisor ;) Sorry to raise your hopes and then dash them - I will speak more carefully in future.All the best,Clayton

It can raise your cost if not planned for. 

:(I have been able to raise rents on a few properties to get everything covered, but a few of the houses would be at a price point that would be nearly impossible to rent out in our small town.

Every year, my taxes kept raising higher and higher.  

Or maybe not so near future, considering the IRS notoriously being decades behind on technology.Once your return is on an auditor's desk, he decides on the scope of the issues to be raised.

They say that the money raised will go toward reserves. 

Most people get a yearly raise.