This allows us to increase our active cashflow to then cherry pick the long term holds we would like as well as work faster.

This can result in a significant increase in property taxes, especially if the property has appreciated in value over the years.The ATI exemption allows property owners to apply for a reduction in the assessed value of their property for tax purposes.

For me, I could handle the increase in cost and still pay much less than If I got a 4/2 SF.

If this property is hard to rent, or is functionally obsolescent (only 1 bathroom, no yard, etc), or has deferred maintenance that will be costly, or is in a location that is not appealing to Tenants, then maybe a sale would be a good option in favor of a property that has better Tenant appeal, which will likely increase rent and avoid long vacancies in between Tenants.An option to consider....

Any tips on increasing income and lowering expenses?

I would like Lawrence or areas that are starting to increase in value but not as high currently. 

So, what is happening today is not as important as what will happen in the foreseeable future.If rents are increasing faster than inflation (I use 5% per year as an average rate), then it may be worth holding the property, since your cash flow will increase as rents rise.However, in your post you stated, "Mortgage rates have kept increasing as well, that's why I put a range on negative cash flow."

For the next billing cycle they increased my charges by $500 and did not notify me of the upcoming charge.

I guess my challenge right now is to define the strategy and balance all the factors, such as job and population growth (value increase), cashflow (demand & supply market, interest rate, property tax, maintenance cost), and risk control (insurance etc). 

@Kolin Goffthe short answer is yes but I don't think an increase of 30% is enough to make it worth it - because (A) DSCR loans typically have fairly high closing costs, which will just get deducted from your proceeds, and (b) your rate will probably go up.