For rare occurrences it is unlikely any one house will burn down so they can spread the cost of rebuilding the one that does over 1,000 houses, not really doable with vacancy as most properties will become vacant at some point.

My first and HELOC combined are $510000 and I wanted to pull out $100K to invest in another investment property. 

Sell it now, net gain about $40-$60K after taxes, commissions, listing price, etcTo properly and adequately answer this question, one would need to know your strategy and goals.Strategy A is based on cash flow to support living expenses.Strategy B is long term wealth building - appreciation (market and forced) combined with principle pay down, depreciation, etc.If you strategy is A, then you should sell as this will not turn out positive for several years down the road (unless you utilize some sort of house hack play, vacation rental to increase income, or any combo of increasing income and reducing operating expenses - which by the way you skipped a lot of those in your analysis so your negative monthly cash flow is actually greater than you explained.)If your strategy is B, then by all means keep it and enjoy the likely future appreciation, amortization and depreciation deductions to offset your actual loss each month until the unit goes cash flow positive.

Combine that with losing the value of compounding, usually makes 401k/IRA loans a losing proposition.

My wife and I drive a combined 10k miles a year, are those of you driving 15k miles each per year willing to pay triple me?

Combining these will give you the best probability to succeed!

That combined with depreciation will usually offset most of your income (rents).

I have a family member who has twice now purchased 5 unit properties, combined 2 of the units to bring it down to a 4 and flipped it. 

We can only hope for a big change in leadership, that the city declare bankruptcy and cede its political power to the county and state, some kind of large federal spending program targeting poor areas or some kind of combination.

If you really think once your first couple tries spending time listing, showing, and then trusting your gut along with a couple books you read is going to be a magical combination, do it.