Together we make about 120k-ish and as were doing this, were actively paying down our credit card debt which together is about 20k at the moment, just fyi.I feel like this is a solid plan, but I'm not too big headed to admit that I don't know everything.

That's not the same as paying cash.According to a different post, your credit card debt costs you $600/month.

After 20+ years in real estate partnerships, here's what actually puts you on the IRS radar (and what doesn't):REAL Red Flags That Matter:The Partner Complaint TriggerDisgruntled partner files Form 8082K-1 disputesPartnership disputes leading to tax filingsReal Impact: Instant IRS attentionSuspicious Loss ClaimsLosses exceeding investmentArtificial basis inflationSudden large losses without economic realityExample: $100K investment claiming $500K lossesRelated Party GamesCircular property flipsBelow-market transfersFamily partnership schemes without substanceWatch Out: IRC §267 and §707(b) violationsDebt Engineering Red FlagsBasis inflation schemesArtificial guarantee arrangementsPartner debt shifts near year-endCritical: IRC §752 compliance matters!

More properties but more debt. 

I don't know the answers on taxes, but New Jersey is the densest state in America.

Did they previous take on bridge debt and has that caused them undo "pain" in the recent years?

After depreciation you probably got that return almost 100% tax free.

Closing costs - you will have to pay taxes/stamps etc. typically as a seller.4.

Sell, get the tax savings while you can.

David,Yes, investing out of state can be a wise choice especially if you live in a State like CA, NY, NJ, CT where home prices are over priced and taxes are brutally high.