My current fear is that the monthly payment on my current house is 2.9k. 

There is also the fear of the unknown -- what else is wrong with the house.Pay to repair and upgrade, then sell.

Aka, I would love to get the 16% increase, need at least 10%, but fear that I'll cave too quickly to 10%.

3) We are familiar with beach (not beech) property in NC and have learned that there are certain sectors of the market that are easier to make money on (i.e. in Nags Head, it's really hard to make money on a $600k house...which is the low end of the market...but easier on a 2M house for a number of reasons.

@Andre O. as Warren Buffet said " Be greedy when others are fearful, and fearful when others are greedy."

My only fear on diving right in and getting the phone ringing is that I will waste money on good leads and calls.

Be fearful when others are greedy and be greedy when others are fearful.

Not getting rid of her for fear of loss of income while you are looking for a new tenant is throwing good money after bad.  

i make 85k plus 20k. i want to take action and not be frozen by doubt or fear i am open to creative ideas, but my main goal is to buy this year and HH to move out 1 year and get cocr of 4% plus AFTER putting aside 26%  (10% pm + 6% vacancy + repairs and capex 10%)

On the other hand if it's not broke, you might not want to fix it for fear of upsetting existing tenants.