I would generally try to avoid insurance claims if you can because insurance is getting out of control nationwide, and we are seeing in FL, TX and CA that claims can follow the house and/or you and make it very difficult to sell the home in the future.Within the mortgage expense category you have 4 separate charges: principal, interest, property taxes, insurance (if you escrow taxes and insurance which 95% of our clients do). 

Now they are paying $2,866/month in principal and interest. 

The principals got 12 to 20 year prison sentences for wire fraud.  

For example we have one rental that has 3x in value and day 1 it was around negative $200 cash flow, today it is +300 cash flow but also have a huge equity and the tenant has also paid all the principal on this property. 

I might have better cash flow just by paying off the HELOC and putting the $150,000 principal in a 5% high-yield savings account which has me considering selling (even for a loss) just to move on.Any advice would be greatly appreciated.

As the loan is paid, the principal balance is updated.  

FHA has caught on to this trend & updated the guidelines to prevent people from abusing FHA financing.Here are the guidelines directly from the FHA Handbook:Policy Exceptions Eligibility RequirementsRelocation: A Borrower may be eligible to obtain another FHA insured Mortgage without being required to sell an existing Property covered by an FHA-insured Mortgage if the Borrower is: • relocating or has relocated for an employment related reason; and • establishing or has established a new Principal Residence in an area more than 100 miles from the Borrower’s current Principal Residence.

You mentioned it was 3% interest only however the math calculates to a payment of around $3950 a month if it is amortized at 3% and 30 years starting with a unpaid principal balance of $937,000.  

For me, it's the principal of the matter.

Amount of current mortgage principal balance2.