Put the profit towards a new Primary residence and ~$50k towards a rental property.2) Rent it out and eat the cash flow loss, hoping rents increase.

Prevent financial loss.

You could explore other options, but with limited income on paper, this might be your best path for now.

What rent limitations are there with S8 vouchers?

@Stefano Grottoli all the $1550 means with CMHA is they will pay up to that amount within Cleveland city limits.

Iwhen underwriting we also want to know the exit strategy of the borrower to make sure they are not limiting themselves to a single exitExcellent!

Your current plan seems like a lot of sacrifice for limited gain.  

Since benefits typically accrue over years, the payoff may be limited if you sell within two years.This post does not create a CPA-Client relationship.

Use a 1031 exchange to defer taxes and reinvest in more lucrative, cash flow-positive properties or diversify into passive investments like syndications.Pay Down Debt: With limited cash flow, focus on paying off the HELOC or smaller mortgages.

Loan PurposeBanks: Often limited in traditional uses such as home purchases or business loans.