Paying off rental mortgages increases monthly cash flow but reduces liquidity, while investing in hard money lending offers high returns but is taxed as ordinary income.Buying a multi-unit rental provides tax benefits like depreciation, while purchasing a business can yield strong profits but requires active management.

Before we sold it we hired a management company to reduce the burden, but even then we decided to sell and walk away. 

Investing in multifamily properties offers steady cash flow, diversification, as multiple tenants reduce vacancy risks and provide consistent income.

Do not place yourself into a position of needing to sell in a reduced value environment. 

The down fall is a Heloc can "Never" be used as an asset or for PITI reserves required when buying a new Primary or investment property.A heloc can also cause major issues with credit and one slight hiccup or missed payment the bank or lender who is holding the Heloc can close or reduce your line of credit.

Some programs will do the full LTV that a long term rental would have and some lenders will reduce the LTV by 5%.

Using a 1031 to upgrade to a two-family could help you reduce or eliminate the $1,000 out-of-pocket expense you’re paying now.Also, condos often come with HOA fees that limit cash flow, so be mindful of their impact.

Self managers can reduce their PM costs significantly. - Furnishings and Design: Active vacation rentals are usually sold furnished, vacant homes are not.

Is there a way to reduce the amount of hours so you have more time for other activities?

This would obviously reduce my cash flow on both properties, as I would be paying the minimum HELOC payment plus extra towards the principal to pay it off quickly.