On balance I have made way, way more money from appreciation that I ever did from cash flow.To me the most important consideration is to always have money or access to money, never be forced to sell.

While rates for the new loan will be higher, keeping your existing loan intact on the remaining balance preserves that low-cost debt.Use the equity to purchase properties in higher cash-flow markets while retaining ownership of your Bend property.1031 Exchange:If you do sell, a 1031 exchange allows you to defer capital gains taxes by reinvesting the proceeds into like-kind properties.

"I'm willing to cancel the eviction so it doesn't reflect on your record if you vacate on x day and pay x toward your outstanding balance"Most tenants are unaware of the long-term consequences when they have an eviction on their record.

You also mentioned an unpaid water bill, so be sure to deduct any outstanding balance from that bill as well. 

Payments stay lower, cashflow better and it'll boost your balance sheet not to mention lower risk when things go awry. 

typically with seller finance there would be some period of monthly payments and then a balloon where you pay off the balance in full. 

Is this from a balance sheet lender?

But, they will be in challenging parts of town where realistically you do not want to own property and your long-run returns will under-perform.I'd encourage you to find a balance of sub-market growth, nearby employment, strong income, and only then a good rent-to-value ratio. 

Or put in your interest rate here, and your loan balance there.The art is where I think most people struggle, and I don't think this can really be done without real world knowledge.  

How do you balance the risks of holding during a market dip versus the rewards of appreciation?