And to top it all off one of the silent investors is threatening to sue for his losses. 

I would imagine there are many investors, first time or otherwise that would have a much different experience and I wouldn't say that a first time investor should start in that area unless they can stomach the potential losses that come along with the risks.  

I know I can do a cash out refinance, but with the high interest rates right now this doesn’t seem feasible.

Put a time frame in the demand to supply the full CCR's, budget, bylaws, loss payee on the master policy... and right to approve.

If a fire does, indeed, occur, and there is loss of life, you are going to be in major trouble. 

I insure for replacement value, not just market value, make sure you get rental loss reimbursement coverage.  

In summary, the end result in making a decision to own a house that is too expensive in lieu of starting an investment portfolio impacts an individual in three ways: Loss of time during which other assets could have grown in value.

I have about 3k in taxable income from stocks and I’m trying to understand how much of my losses I should sell off.I know the irs limits your losses to 3k per tax year.

Keep things simple for tax reasons and make sure you claim all the deductions (gains and losses) to offset your tax liability.

Sit her down, have the talk, and work together as a team unless you see no future, at which point cut your losses and move on.