.- 1031 exchange opportunity: I could potentially do a 1031 exchange to acquire a duplex or triplex, deferring taxes.- Access to funds: I could consider a cash-out refinance or a HELOC to access funds for additional investments.- which property would you recommended me to keep? 

However, these programs typically qualifies borrowers based on their income, such as tax returns.The DSCR would be a good option considering you and your husband are entrepreneurs and the tax returns don't look good on paper.

As you alluded to, sometimes a passive note investment purchased for monthly payments “goes south”, and becomes an active participation investment, with plenty of additional capital required for legal fees, forced place insurance, and property taxes.  

Consult your local CPA to calculate accurately and minimize your tax liability.

I have been listening to the podcasts for years and have finally gotten serious about making this move to better my families situation. 

That leaves $400 to cover taxes, maintenance, vacancies, etc.Now, let's pretend ALL your expenses come to $2,600 and you have $400 left over.

We pay payroll taxes and workers comp, we comply with state and federal laws regarding work place safety, PTO, vacation, labor laws et al.

You may be able to deduct mortgage interest and property taxes before the property is in service. 

Our avg monthly expenses with reserves is around $1500 (mortgage, taxes, insurance, utilities, reserves ect).  

And finally regarding the interest, yes doing these 10 yrs-loan the biggest goal was save some money from the interest.