Even a typical water heat replacement would set you back signficantly.There's plenty to the puzzle that i am unaware of but with what you've outlined here i would consider passing on the property.you know you need managementyou know you need to remove at least one tenantyou know cashflow is meager after considering management.i personally wouldn't recommend a client take on the risk for such a paltry pay out out of state.Even when considering long term appreciation the average amount of headache one assumes with a property will bog you down before the long term play pays off.

@Ryan Blackstone I thought your name sounded familiar!

Sounds like a cool plan.Welcome to BP!

Sounds like you have cash.  

@Reed Starkey, well if your business is tracking and growing that sounds like a good problem to have.

Sounds like the options are to either raise private money, or pump the brakes and save up a bit more in both cash and equity. 

It wouldn't be a way around the regs.Sell would be something if you would make a decent profit and could find something to replace it.If you convert it to a LTR, could you absorb the expenses?

You sound ridiculous.

Cap Ex expenses will bite you but it sounds like you have two of the big ones already accounted for.

Quote from @Robbie Shiver: Robbie, Sounds like you have a unique property and a growing lifestyle!