She ended up using a 1031 to exchange into a smaller multifam near Austin that better aligned with her long-term goals.

One idea that could align with your goals. 

If your leasing application process is thorough and well thought out, and if your lease agreement has been well drafted by your local attorney and if it includes clauses that permit you/your property manager enough latitude to maneuver and anticipate undesirable tenant behaviors, both actions and inactions, and you have operational processes which align with enforcement of your lease, then you've done all you can do to reduce this inherent risk of an undesirable tenant.  

It’s a tough decision, but we’re adjusting our strategy to align with market conditions and our timeline.Having come from a corporate background, I’m used to doing these kinds of planning exercises.

Investors can always benefit from working with someone who knows how to align opportunities with specific strategies.Are there particular types of properties or investment strategies you’ve seen gaining traction in the Seattle area lately?

Your best bet would be to find a portfolio lender whose niche aligns with your investment strategy. 

Finally, define your long-term investment strategy, whether you’re aiming for cash flow, appreciation, or a combination, so that each decision aligns with your bigger goals.

Ultimately, it’s about finding an arrangement that aligns with your goals without compromising your ability to discover the best deals.

Running a detailed cost analysis for both options will help clarify which aligns better with your goals.

However, it's important to note that Section 179 deductions typically apply to tangible personal property used for trade or business, which may not directly align with rental property activities reported on Schedule E.