The reality is that low supply of single family properties will keep a high floor for prices.  

This includes requesting return of your funds.

Markets to look for: Without knowing your budget, it would be hard to say however, Florida is a very popular market for Canadian clients because of the positive cash flow and the ability to find affordable properties in high occupancy areas. 

Your concern is a good one, buying in this market at high rates = high payments and you may not cashflow if you were to repeat the process.However, 2 considerations. (1) By not doing it you don't have 800-1000 in your pocket, so although the payment on the new place might be higher than in a normal market you've got extra funds to cover it.(2) Your new rate is not forever, perhaps in this high rate market, it's as you say, best case you're breaking even if you repeat this process.

Lots to unpack here; Insurance quotes I have seen for myself (33 years old, healthy man, single) was high 300's for a decent policy.

But I would like to use my chance to comment on this to emphasize how much of this situation really reflects on how you've managed the landlord-tenant relationship to date.In a high-regulation area-of-operation like California, cordial landlord-tenant relationships will get you past a lot of garbage like this.

.$500 seems high, but depends on the locality.

I no longer qualified for traditional financing because I already own many rental properties and my DTI was high for the bank, so I purchased these in a business entity with a trusted private investor and was able to refi the 1st property/sell the 2nd property to pay back my investor and ultimately keep the better property for zero money down.

A better question might be: What are you doing with a property that has negative cashflow or is not producing the return you expected? 

That said, I bought them with VA and FHA loans so my return on assets was still pretty good.