We're also looking at refinancing the mortgage on this property to decrease the monthly payment, adding to the principal that we can pay ahead on the loan every month.It's good to have all this input and see that either decision is a good one, we really appreciate all the input. 

Equity itself does not matter.You can also purchase less than what you sold (thus decreasing equity or increasing equity depending on whether you add cash or not) and you may take cash from the sale (also decreasing equity) but in those events you are doing a partial exchange and you pay tax on the difference without jeopardizing the remainder of your exchange.

What are the quickest ways for you (or your wife) to increase your income or decrease your expenses?

An influx of REO's (Real Estate Owned - foreclosed houses that banks are reselling) can drastically decrease housing prices in an area.Now if these factors are not what is desired, the key is to adjust your expected sell price.Price overcomes all objections.Even in some of the worst markets in the country, houses are still selling.

My properties aren’t in downtown, so i received a decrease.

In my area, if you purchase a smaller multi family at fair market value, it still might not throw off cash flow for you or even decrease your current housing expense from what it is now.

Surely it was possible to decrease poverty. 

I am sure I can decrease to half but like to see what others are thinking) repairs $5500Supplies $1600Taxes $12,561 (based on my assessment, this expense will increase to $16K after sell)Utilities $13309 (Will have tenants pay this.

I am sure I can decrease to half but like to see what others are thinking) repairs $5500Supplies $1600Taxes $12,561 (based on my assessment, this expense will increase to $16K after sell)Utilities $13309 (Will have tenants pay this.

Most of the current craz seems to be driven by low inventory with no decrease in buyer demand.