Withoutknowing the details I can not suggest which would be right to add on.Several you should pay attention to are:- Ordinance & Law: Provides additional building coverage to deal with rebuilding costIncreases due to changes in Zoning or Building laws- Personal Injury Liability: Libel, defamation of character, wrongful imprisonment, etc.

No capital gains! 

Slow start but hoping to gain momentum.

This route requires more attention as you will need to ensure that you are finding good deals wether they are on the market or off market.

@Edgar Duarte Selling now under the primary residence exclusion avoids capital gains taxes, allowing you to reinvest the $500K equity in diversified assets like index funds or additional rental properties.

This is the sum of all of the sources of gain including not only cash flow and appreciation but also depreciation and amortization of the loan. 

So all of the gain and depreciation recapture are initially still tax deferred.However, like Joe said, the down side is later when sold  you lose the 1031 option. the client will pay tax on all gain and depreciation recaptured from before the 1031 also. 

Is an IRA subject to capital gains tax?

Is it better to sell, pay off mortgage and capital gains and take the cash to invest in another property or is it better to refi/ETO and take the cash to invest in another property?

We are responsible for the mortgage as of January 1 - but it's come to our attention that they stopped paying it back In October 2024.