If you're solely focused on extracting the maximum value from the property, you might end up working against yourself.

If I had not extracted value I would be rolling in cash flow. 

I think I explore equity extraction to have some liquid ready to go.

Keep the two properties and do a cash out refinance - Extract cash from the two properties and while keeping the two for long term leases, use the cash to buy another property and hope the interest rates drop this year which is likely from what Powell is saying. 

It turns out that for a year, minus the first "dead" month, I assume to extract a return of $12,000 (I also deducted one additional month based on the assumption of the necessary "additional investments" in repairs annually): $1,200 * 10 months = $12,000.Cash-on-cash return = Real estate income received for the year before taxes/amount invested.

You will need to buy another STR to extract tax benefits for the following year.Thank you for bringing attention to the potential tax benefits of STR investing. 

Just try to extract what value you can, then focus on scaling your own business based on your own personal circumstances... one deal at a time.

I do not flip (it is a job) and post rate increase I cannot find properties in my market (San Diego) that do not bleed cash after extracting the value. 

Is there anything we need to ensure is included in contract or other legal requirements so we can verify this is legitimate and extract her from it if not? 

I'm in northern Indiana and had a very efficient heat pump/central AC unit and when the outside temp got below about 40 degrees I had to use my forced air furnace as backup because the heat pump couldn't extract very much heat from the outside air to bring inside temp up and keep it comfortable.