That way you still get cash (non taxable by the way) to pay of bills/loans and/or purchase additional rental properties.

We’d like to get a 3bd place (I work from home and there’s a chance we’ll have a second kid).Savings Rate –If we limit our housing expenses to $5k/month, I’m estimating that we’d be able to save approximately $80k (inclusive of retirement, college savings, and taxable) a year plus 100% of any bonus.As I said curious about anyone that has been in a similar position or more generally any thoughts on what you'd do in our position.

The cash. you take out is taxable but the rest of the gain is sheltered in the 1031.

Primary residence gain is not taxable (to certain limits), so when you convert to investment property, you convert at a higher basis. 

The conversion is not a taxable event. 

In addition, your 30k cash-out is not taxable - but your sale profits are (even if tax-deferred through 1031). 

So if your passive income from your SD property is negative 20K and your W-2 salary is under 100K, then you'd be able to deduct that 20K loss against your ordinary taxable income. 

The partner who sells or exchanges his/her interest will have some taxable event.

As an agent, it will be harder for you to get a loan because you need to show you have two years of taxable income compared to a regular job.

If insurance proceeds exceed the casualty loss, taxable gain results unless those proceeds are used to acquire qualifying property under the involuntary conversion rule.