So neighborhoods haven't improved noticeably since they were half the current price.  

I am converting this back to a duplex, going to live in one half and rent out the other.

If your rent increases just mimic inflation close to half or more if you self manage will bump your yield up and cash flow. 

To qualify for REPS, the taxpayer must spend more than 750 hours per year in real estate trades or businesses in which they materially participate, and more than half of their total working hours must be spent in real estate activities.

We would both contribute to the rehab and I would repay her half of the initial investment.

But I had to find a new market and it was thousands of miles away from my house. 

Good LuckTypically multifamily is 5 units or more and Single Families are 1-4 units, so I was confused, so thanks for the clarification  Actually, that part is only half true because there are additional criteria that need to be considered to be multifamily vs SFR, such as separate utilities, heating systems, how they are attached to one another (Vertically vs horizontally), etcan easy way to differentiate and communicate is to call it multifamily if it has more than 5 units. and Single family for 1-4 units or call it how it is duplexI own several duplexes that are considered single-family homes by the city.In the end, it is your decision on how to use it

Start at 6 months back and .5 miles out, same beds and baths2.

After a year and a half of him creating unnecessary issues, we decided it was time to find a new manager.

Honestly, In the grand scheme of things, either option is going to be fine.If your goal is # of doors, then use the lever, if your goal is increased cashflow in retirement make the extra payment I'd say.If you really want to make more payments, make biweekly payments of half your monthly mortgage ;)You wont feel it as much.