If you need the cash flow to live on and it will improve your lifestyle, then go for it.

I position my inspections as 'planning for future repairs/improvements' which mitigates that whole 'he's here to get my security deposit' mindset.And, I would rather have the tenant with me than to have him later claim that something was broken during the inspection.  

The tax benefits refer to the tax deductions from mortgage interest and property tax.The returns mainly rely on appreciation, and the cash flow only improves in the last few years, also depending on securing the 5% refinance rate.I've learned a lot from this forum, but as I start to operate on my own, I'm still not completely confident.

Prepare financially by saving for down payments, improving your credit score, and setting aside emergency reserves.

On paper, that's a 88% return before depreciation (can't depreciate land, but you can do a cost seg on the septic and other improvements), appreciation, etc. 

In other words, not resold to the government so the bank had more flexibility on the condition.I look at the original commitment letter and it states "xxx amount will be advanced at closing for the purchase of an investment property, and the remaining balance of the loan to be placed into an escrow account to be disbursed as improvements are made".No points, and only one closing, so I don't have to deal with a short term HML that I have to refinance in under a year.Hope that helps!

If you have the cash to make a lump sum payment and are happy with your current loan terms, recasting could be a smart move to improve your financial flexibility.

Sounds like you are juggling a lot of balls in the air!

These items have me slightly concerned and weighs on my decision, making me want to "take the money and run".Question: Would you sell, abandoning a 3.125% interest rate, $1000/mo cashflow (which I believe would be roughly halved if a loan were taken for the capital improvements to the larger property), to lock in the equity gains tax-free made since 2020?

From experience, I’d recommend getting pre-approved, improving your debt-to-income ratio if needed, and researching local assistance programs.