However it used to be our primary residence and we became accidental landlords when we moved. 

It is very homey and welcoming to new residents and has a mix of young families and, on the flip side, a lot of people who have been in the neighborhood 20+ years. 

Normally a personal residence isn't an investment, especially the way an average person buys a home.

OTOH, if she bought it in 2006 at the height of the previous bubble, you may not be too bad off.1031 exchanges are for investments only, not your residence.

Would you recommend buying those services for rental and/or personal residences (or neither)?

Only one primary residence per individual or married couple qualifies for the Louisiana Homestead Exemption. 

@Kurt Traynor  FHA isn't only for first time homebuyers, so if you currently don't have a primary residence and are looking to purchase one, you would be eligible for FHA assuming you meet all the credit/income criteria.

I call this my "self-funding" model.I have talked to a few larger banks (who love my income, debt ratio, cash flow and FICO score) BUT will only do a HELOC on a primary residence or a 2nd home. 

Ideally I would like to use the profit to pay off some of my principal on current primary residence mortgage and use the rest for investing in a townhome that I can rent out...Thank you for your inputs!

@Jim Brandt , Unfortunately, a house that is in your name and used for personal purposes for more than 14 days during the year, or more than 10% of the number of rental days if greater, is considered to be a residence (not a primary residence).You are deemed to have used a property for personal purposes when it is used by: Anyone who rents the property for a price that is less than fair rental value.So the house will not qualify for rental property or investment property.