There are also tax issues. 

Is it worth waiting until September and hope the market is still as strong or take the hit on capital gain taxes and sell now.Secondly, if we do hold this property would it make more sense to prioritize debt paydown (instead of investing in another property, put our cash towards our mortgage payment and have it paid off within 10 years.

I am looking for best practices both from a legal protection standpoint and from a tax advantage standpoint.

For property owners with out-of-state investments, is it necessary to keep all receipts and invoices for write-offs during tax season, even smaller jobs performed by the PM's handyman?

I do my own taxes so I can see my taxable income reduced every time I add a property into the tax return form.

As long as you have positive cash flow on debt that is tax advantaged you are not over leveraged.

That if the property is worth $500k, and they are owed $100k, that if it sells at auction for $500k they get all the money6.

Taxes! 

We have a property in costal NC and selling is just a death trap of taxes.

Factors such as higher interest rates, taxes, and insurance can significantly impact potential returns for investors.Remember, success in real estate investment often hinges on buying properties at the right price rather than selling them.