But if you decide to sell to invest closer to you then a 1031 exchange can keep any tax-deferred while still maintaining or increasing appreciation and depreciation. 

Any ballpark idea what percentage our property taxes would go up if we went from 2 to 3 units and how does that get plugged into the calculation?

@David SchimanI think it mostly depends on your level of expertise in real estate.

I consulted my cpa and he states that I will owe 100,000 in taxes leaving me with 600,000.

We know this from historical tax court cases. 

I am not going to pay 25*600 to file taxes for each entity :)

If you're just looking for general guidance around a successful STR journey, I have some friends with deep insights into everything from REI tax strategy to marketing and creative financing.

Even if somebody came to him for help, he'd turn it down because the significant time involved (even will billing for it) and the costs to the client are prohibitive.There are lots of rules, I don't bother to know them all since this is avenue is too extreme for me, around IRA's and 401k's (and the various other tax advantaged accounts). 

If the basement was finished it would be about 1,500 sq. ft.Option 1- Fix & RentCost of Repairs: $10,000 (Estimate to get the house rent-ready, would leave the basement unfinished)Market Rent: $1,100Monthly Profit: (Rent $1,100) - ($700/month) - (8% property management cost is $88) = $612/month Other Benefits: Tax write-off, continued appreciation, continue to pay off mortgage, risk-management against my other rental property, passive income.

I only gross $5600.. after taxes, benefits, 401k. its only  $3800 a month.. and if I take the 401k loan that's another $1160 out of my check 4.