(Except something like 1/2 of a duplex where the rental 1/2 is worth as much as your exchange.).

@John Brown Running a short-term rental (STR) on a subleased property, often called rental arbitrage, is feasible but requires careful planning.

To achieve REPS status you need to be actively involved in your rentals.  

Quote from @Quan Pham: I'll give you the easy answer: sell.If you were fired up about owning an investment, I would recommend keeping the house as a rental.

I have a w-2 income and own three properties, all long term rentals, that I've had for a few years.

Bought from neighbor next door to rental we owned.

You've done well with your Class A rental, generating $500/mo in cash flow, this adds up over time.

I just stumbled upon it online and I’m trying to research it myself. 

Cash out refi only if the rental income significantly exceeds the monthly payment and you want liquidity to invest elsewhere.2.You can maybe do a HELOC if you want a smaller loan that doesn’t involve refinancing the entire house.3.

Quote from @Ben Trageser: If you live in your short-term rental (STR) property in a future year after claiming depreciation, depreciation recapture does not occur immediately.