If you decide to sell and find an investment property with a greater cash flow potential.A 1031 exchange would allow you to indefinitely all of the tax and use it to your advantage to reinvest into larger nicer property/properties.

They even sent someone from the city to the house to tell us to stop operating it as a STR. 

My only reply here is to say to simply focus on the business objectives.

Quote from @Amy Lauro: I am a new investor looking to partner with other investors to help homeowners facing foreclosure.

For me, that was my #1 negative factor about CA as a market, the resistance and denial to face the realities.

Welcome to BiggerPockets!

Welcome to BiggerPockets!

I’m new to the community and I’m planning to start a Section 8 rental property business.

In a city like Philly, you will face many challenges - you need to learn the market and know the neighborhood and the block and make sure all of your numbers are within reason, you need very reliable contractors, you need a to understand the permit process, you need to be familiar with market expectations. 

That's a decision you have to make.