Be careful about using your current home equity as a down payment on another property.

HI Vince, as long as you are vacating your current primary home and moving into a new primary that is acceptable, but just make sure you obtain a 12 month lease in order to use the rental income to offset your mortgage payment and not getting hit twice for your current mortgage and new mortgage.

I've done extensive research into the options and a lot of the paid options seem to focus on teaching specific investment methods.

Either1) your startup takes off and you can distribute profit fast enough to pay off your debts, or2) you find another source of $100,000 a year (which barely even starts to pay down the $300k, but might provide a better chance for a better loan), or3) you BK and possibly lose the rental houses to creditors (hopefully not, but we don’t know how they are held), or 4) you sell the houses, take the tax hit, work with the IRS on a payment plan whose interest will be much lower than your CCs, and focus on the startup.  

I bought the duplex for $145,000 which put monthly payment at $918 monthly.

The letter also stated that the current landlord should have begun collecting payments toward to the security deposit upon receipt of the letter they provided me, which they did not. 

You inflated the price $70k but they are only making $50k in payments.

This was my first investment property and I used a loan from my 401k for the down payment and also used a local credit union for a 10% down payment on it when I bought it.

The down payment is based off the total adjusted acquisition cost – the purchase price plus the cost of renovations.

Given your situation, one strategy that could work really well for you is the BRRRR method (Buy, Rehab, Rent, Refinance, Repeat).