Hey Mohamed - I can't help with the tax implications, but as far as financing your potential investment properties, there are some things to be aware of. 

Made a lump sum and now I make money in interest payments and I don’t have to have touch the house as far as repairs or landlording at all.  

It may make a difference if the rent for the $300k property is so high there will be few tenant prospects available and it may sit vacant.

You don't know how many times I coul get conventional loan in this way.In my case, my actual DTI is very low, but the way the gov calculated the income is so 1990-style that it doesn't reflect our true buying power.

I have no idea what it is. So

People will give you money only if they trust you and are comfortable with you.As far as getting in front of people - start with those you already know and just be networking all the time, telling everyone what you do and the opportunities you have.

As far as Option 3 selling the house and looking elsewhere, the places I'd consider are Sacramento, Nevada or Arizona (where I would buy if I sell off all my Indianapolis properties). 

This is so informative, thank you so much for decided to share your experience 5 years ago!

As far as how hard it is to get the tiles level, it depends on what tile your using.

With the initial drop in cost from the work and insurance to cover my lost rent I should be in much better condition as far as financing goes.