I offered if we made an exception there would be a fee for deep cleaning to rectify and pet odors allergens etc.

Reduce your expenses.

I have photo documentation and videos of all of this.At the end of the day insurance would not cover this and we had to pull the claim.They are charging us for the full amount and I’ve been able to reduce it by about a 1/3 from $3000 to $1900. 

If you think that the appreciation will be more than your tax increases or your reduced cash flow, maybe lean towards keeping the properties especially the one with the 3.865% rate. 

I'm all about reducing expenses and water leaks are unnecessary expenses that I don't get informed about for a month.

You want to rent out your house but wonder if you should use a property manager or self manage.I always advise my clients to use a property manager to make owning investment real estate as "passive" as possible and if the property manager is good they will help you maximize rents with their management and reduce turnover and the cost of tenant turnover.

Without really knowing the numbers, would refinancing at a reduced leverage be possible? 

They have some low down payment 1-4 unit investor programs that can reduce the cash needed (equity line amount) to close.

My partner and I are both on the higher end of tax bracket, anything we could do to help reduce the tax bill from these transaction? 

They are already going to have to sell at a discount for this to be a viable wholesale deal and then on top of that reduced price they will have to compensate the agent.