I'd sell because you are reaching the time when you lose the cap gains exemption and that $24K would take over 2 years of renting to get back.I had a condo that I owned for a long time and I sold it despite it being paid off and having long term tenants. 

I think this is most valuable because there is a lot of discussion surrounding owning investment property in an LLC or not, and this insurance topic rarely comes up in the discussion.

If 1099, why can't he get his own liabilty coverage?

From owning this property, I have learned so much and overall it has been a great experience!

If you're in a high-cost area, consider out-of-state markets where you could buy a rental property outright. 

It’s still surreal to me that I’m able to own real estate at 20, but I know this is just the beginning.

So, what is happening today is not as important as what will happen in the foreseeable future.If rents are increasing faster than inflation (I use 5% per year as an average rate), then it may be worth holding the property, since your cash flow will increase as rents rise.However, in your post you stated, "Mortgage rates have kept increasing as well, that's why I put a range on negative cash flow."

I am in the process of getting my Michigan Builders License and I currently own 4 small rental properties.

This is a fine example of where to research out of state investments as the housing prices to purchase are still reasonable and low (not like California where I am and entry level house SFR is a million dollars). 

Alternatively, you could draft a contract with a delayed execution date, stating that the agreement will officially go into effect once the rule is lifted.