The capital required for Denver, and limited cash flow makes it a tough market to get your next one.

In your opion #2, would that require you to rent a home in Seattle?

At the same time, I am also using this opportunity to move that capital into an LLC, and would look to extra financing to purchase a new property or properties of equal or higher value (per 1031 exchange requirements).

Holding a license requires fees.  

Basically a partnership.

Purchase price: $275,000 Cash invested: $45,000 Sale price: $400,000 Contributors: Adam Schooley This townhouse, which had gone through probate, suffered from significant water damage to the drywall and required updates throughout.

Purchase price: $275,000 Cash invested: $45,000 Sale price: $410,000 Contributors: Adam Schooley This townhouse, which had gone through probate, suffered from significant water damage to the drywall and required updates throughout.

You'll need more capital and most will require a personal guarantee and personal financial backing. 

You are basically changing the dwelling and Baltimore City is not gonna let you do it without getting your money :D))

It requires registration, so there could be some fees or work involved in setting up.