Whichever gives the best return.  

At the same time, I to minimize my downside in investments so LTR's would be a more consistent cash flow option (at least to me)Something my wife and I have thought about doing is at least reducing the principle balance so that whichever option we go for, we at least aren't losing money every month.Really looking for some clarity here as these next few years are going to be very important in order for us to set ourselves up well for the future.Thank you in advance for your thoughts and advice on this topic!

Sellers have every right to accept or reject offers and whichever they choose to do has nothing to do with you nor does it affect you in any way.

Also, for management- the question needs to be asked- Whichever of you will manage... will this person do a better job than the best 3rd party money can buy at the same rate? 

•These programs of various types would own the rental lease for whichever houses they want, and be responsible for rent payment, which would be as low as reasonably possible.

Not familiar with your area’s standard contract but i would guess it is something along the lines of“I, the Buyer, will buy it from you for $217k as long as it appraises for thatIn case it appraises for less I am willing to buy it from you for appraisal + $12k or $217k whichever is less”i bet you nowhere in there does it say“I, the Seller will sell it to you for $217k.I, the Seller will sell it to you for a lot less if it appraises for a lot less.

Past copies of utility bills must be provided for the preceding two years or from the time the current landlord acquired the building, whichever is most recent; and(4) may, if the landlord and tenant agree, provide tenants with a lease term of one year or more the option to pay those bills under an annualized budget plan providing for level monthly payments based on a good faith estimate of the annual bill.

So whichever feels right to you.

Further, the amount of gain up to the amount of depreciation taken or allowed, whichever is greater, is subject to a recapture tax, currently capped at 25%.

The time of the notice must be at least as long as the interval between the time rent is due or three months, whichever is less."