I have a pretty large emergency fund in place for those properties, but I wonder if that capital could be better employed elsewhere (potentially acquire another property).  

We've learned a ton, but at a significant cost.

We shall see how things unfold but it doesn't look good.   

STR is another concern, many towns have laws against it but most towns do not enforce these laws, just make sure you are aware of them becuase they can be enforced. 

You can do an exchange for less than the full amount, but you will owe taxes on the boot.

But because the duplex unit is smaller it is easier to maintain.  

But the thing to know is it is that is not easy to duplicate in todays market.  

Not all, but most.

In our case this was an annex built without proper permission, which limited the m2 that the bank would value the property against, and limited to how much space we would be legally allowed to use.

A lot of times these threats do not matter much to Contractors, but they may help.