You are losing money every money, and you are possibly losing more because the tenant feels entitled to cheap living.I recommend you increase the rent to the market rate and get paid what you are worth.

You can even create a balance sheet if you want to get crazy.I definitely recommend scanning all of your documents associated with the rental using a free app like Genius Scan and get those into some sort of digital document management platform such as Google Drive, Dropbox, etc.

However dependent upon taxable income you could get away with a pretty low tax bill due to favorable capital gains tax rates.Be sure to work with a qualified intermediary and a tax professional to ensure you comply with all 1031 exchange regulations and to be sure you keep basis correct as all a 1031 does is defer your gain.Happy to help run some numbers or do some basic analysis for you if you would like. 

I recently watched a video where an investor bought a mortgage loan at a steep price, with an exit strategy that hinged entirely on getting the borrower to agree to one specific term.

A good, well-qualified borrower will rarely get into trouble.

It's listed below coz the sellers are moving out of state and want to get rid of the house.

The tenants are still under lease, so why would they get their deposits back?

You can get solid cash-flowing single families in the 90-120k price range and duplexes in the 130-180k price range.

Any recommendations are appreciated.If you're just getting the walls done in the factory, and they have to be assembled onsite, you're going to have a hard time finding contractors on your own. 

But we do have that option in year 3 and after.Other than that we have no debt.So, any upgrades to our duplexes will be from our cash.This is our plans for year one and two.Year one I get a duplex, then again year two.