Food and gas are fine, but try to limit what you are spending.

The tenant could also be judgment proof and trash your place and you incur additional rent losses and damage.

if its commercial prop, why are they at a loss not profit?!

One family even told me they were having money problems after the birth of a child and the loss of a job. 

It wasn't an expensive class to begin with, so I figured it wasn't a huge loss if it sucked.

In fact, I still have a carry forward loss of somewhere around 100k on the books. 

You suddenly will realize that on papers you might be at no loss, but commissions (6% realtors fee) and blah blah type expenses will increase your loss or eat up your profit .

I'd like to sell my home and get something smaller, and then use the savings from the decreased mortgage to put towards investing, but that doesn't seem likely without a considerable loss.

Worse, what about unexpected personal losses not even related to real estate (job loss, health issues, catastrophic event, etc.)? 

Unless there were some special circumstances, paying par value for the note will cause general loss as future value depreciates.