Not to lead you to an answer, but slight diversification while achieving similar results could serve you best in the long term! 

Diversification would be a pro for rentingit; more work and liability the con.I’m kind of on thefence.Am I missinganything?

But you will be paying tax on all or most of the difference between your net sale and your net purchase One way to mitigate this would be to craft a diversification exchange and purchase multiple replacement properties. 

Then, once you've gotten enough for 20% down and a few months reserves on a nice linear market in the midwest go buy a 1% rule house for $100k and start building in some good cashflow and diversification. 

Offers great diversification in one property. 

@Craig Fitzsimmons, What your looking at doing is a "diversification exchange" - selling one and buying more than one. 

I have the gumption to work and a history in project management, construction, engineering, and research, but I haven’t played with sums this large and would love some guidance on where to focus my efforts.About his investment interests:-He is seeking to invest around $5-7 million-Cash-Potentially open to small loans if the interest rate is near-zero-He is interested in commercial real estate (mainly)-Open to exploring residential-He is interested in a potential longer-term investment in a commercial office space where he can set up another company (the holding company for his other investments and consulting work)-Interested in (but not set on):-Triple Net Leasing-Old Mill Building Restoration to commercial or residential-He is interested in investing in the Greater Boston area, Massachusetts only-Seeking areas which have future potential for growth-Currently considering:-Burlington, MA-Waltham, MA-Revere, MA-His investment goals:-Diversification of his portfolio from stock-only-He is interested in minimizing tax burden-Minimum five year investment-Creation of a division within an existing company to manage a real estate portfolio-He is extremely open and interested in ideas, but is seeking to act within the next 6-12 monthsI *KNOW* that I am not the likely candidate for assisting with this, but he is seeking to work with someone he trusts and has assisted in the past -- that is where I come in.

I would recommend diversification and have both.

In some states $80k isn't enough for a downpayment, in other states it will start a small portfolio of 3-4 homes providing some diversification. 

If you reinvested in rent properties in cashflowing markets, you could easily triple those returns and have greater diversification of income (more properties).Also, since this was your primary residence, you are walking away from the capital gains deduction if you hold it as a rental for more than a couple years.No question.