@Kenny DahillThe most recently published version (February 2019) of Fannie Mae's selling guide says that there is an exception that allows you to transfer a property to an LLC. https://www.fanniemae.com/content/guide/servicing/...Per Fannie Mae:A transfer of the property (or, if the borrower is an inter vivos revocable trust, a transfer of a beneficial interest in the trust) to *a limited liability company (LLC), provided that: the mortgage loan was purchased or securitized by Fannie Mae on or after June 1, 2016, andthe LLC is controlled by the original borrower or the original borrower owns a majority interest in the LLC, and if the transfer results in a permitted change of occupancy type to an investment property, such change does not violate the security instrument (for example, the 12 month occupancy requirement for a principal residence).You should reach out to your lender and run this by them and see what they say.

You get an immediate tax deduction for the present value of the trust principal as determined by current interest rates and life expectancy.

Viewed this way, even the mortgage "expense" cost drops over time as the proportion of interest to principal drops.

Debt service includes principal and interest payments.

If you can, you might look at a heloc to leave your current principal and interest alone and give you some flexibility as well just in case something unexpected comes up. 

I ran some numbers on a duplex with a lender and this is what it looks like:Property Price: $306,0003.5% Down FHA loan @4%Unit A Rent: $1,050 2 bedroom (We would live here)Unit B Rent: $1,350 3 bedroomTotal Monthly Payments ~$2,125 Includes: Principal & Interest, FHA mortgage insurance, homeowners insurance (estimated) and actual property taxNoted that tax and insurance can rise over timeLiving in the house, our monthly payments would be ~$775 ($2,125 - $1,350).Once we moved out, and are able to fill unit A with a new tenant, theoretically we would be cash flowing $275 ( - $2,125 + $1,350 + $1,050).

Since the expenses are a bit heavy we are estimating a rate of return of 8-12% and a full principal payback in the year following.  

If they are roughly the same, I'd say sell CO and invest in Dallas just for ease of management and the ability to take some profit without paying capital gains.And I don't know if it's common to use a HELOC for a down payment, but we refinanced our principal residence with cash out, then used that cash as a down payment on our second residence and turned the first into a rental. 

You could make some mistakes that cause loss of principal for instance in any of numerous areas such as market selection, property selection, purchasing, rehab, etc..

Take the 30 year extra cashflow and throw it at principal.