I heard that with a 1031 exchange we would need to replace the entire debt.

the answer i'm giving is based on the assumption that you do not want to / can not float the negative cashflow any longer. and note: even if appreciation / debt paydown / tax benefits strongly outweighed the negative cashflow, most investors wouldn't want to / couldn't float that. so that said, i say SELL. you have just over a million dollars in equity (minus transactional costs when you sell), and you could do a 1031 exchange into a ~4 million dollar CASHFLOWING property. i invest long distance into value-add multifamily on the west side of chicago. gearing up for my next deal right now. in that price range you could easily get a value-add multifamily with potential to cashflow 15k/mo+++ (up to 40k/mo) once it reaches its full potential. it sounds like you're in markets that are probably strong for appreciation and weak for cashflow (with the long term rental strategy). if cashflow is your goal, 1031 into value-add multifamily in a higher-cashflow area. don't let having to pay commissions during the sale stop you. you're already losing so much annually; you have to stop the bleeding at some point. also note that right now, with the way these two properties are losing money, that might negatively affect your borrowing power when you go to buy the family home. feel free to dm me if i can help in any way!

You are looking to sell with seller financing, but you also want to do an exchange it looks like.

You hit the nail on the head with the value we are trying to provide; a fee in exchange for saving an investor potentially years of headaches and lost opportunity going through team after team until they find the right fit.

Here's my situation in short details:Bought a commercial property for $699K in 2019 through a 1031 exchange which cash flowed beautifully until late 2022 when the tenant bankrupted and moved out. 

I'm located in the SF Bay Area in San Jose, so if there's anyone I can buy a coffee in exchange for some of your time, I'd be more than happy to connect.Lastly, I don't think I'll be ready to start seriously looking for a first investment for a few months, so the question is, when is the right time to start talking to people like real estate agents, brokers, lenders etc.?

I  am happy to reach out and provide my phone number or Facebook orcoach.I owe 10 grand on the 2 bed I forgot. 1031 exchange is likely best at this point in your build.

You can do a 1031 exchange.

What's the best solution out there for managing document exchange?  

The rest goes into your 1031 exchange.