If your portfolio is large enough, 5% is better.Now, some people believe that this diversification reduces the chances for a large gain.  

Assume my marginal income tax bracket is very high, and mortgage rate is 5.25%.

My income doesn’t show itself as being very high, but I have a relatively large amount of cash to put down.

Open to any advice here tooI want to sell my underperforming assets to reduce expenses.

Yes it's a huge problem.You should fix this correctly now.Open the walls and put in proper sound reducing insulation.

They already lost some major players due to the state capping rates https://www.foxbusiness.com/lifestyle/california-insurance-c... will all insurance companies stop coverage, raise rates or reduce what they cover?

If he’s open to it, that could reduce the upfront capital you’d need while making the process a lot smoother.

That can be used to buy down the mortgage rate or reduce closing costs. 

Self managers can reduce their PM costs significantly. - Furnishings and Design: Active vacation rentals are usually sold furnished, vacant homes are not.

If your manager is just 'keeping an eye' on things, collecting/reminding on a few rents here and there and some light cleanup while being compensated in free or reduced space rent then classifying them as 1099 subcontractor is great.