If you choose the 5 unit keep in mind that it may be easier to force appreciation by making improvements that lead to increased cash flow.Good luck.

He has a variable interest rate and it recently increased the $400 which has caused the hardship.

Alternatively, you could lower your maintenance or management and increase vacancy, etc.

Because of the prohibited transaction rules, doing so could be a violation of the rules, or at the very least, would limit your flexibility with the investment and increase the chances of a prohibited transaction occurring after the investment is made. 

Austin is still growing rapidly as are property values.Also, historically values rise, plain and simple.

Interest rate, I am going to use 5%.This is my quick analysis:Rent Income: $80,533.57Expenses (50%): -$40,266.59DSYR: -$26,400Cash Flow: $13,866.59CoC: 11%*Note: This did not include closing costs, an increase in the reserves or taxes which I do not believe were on there. 

A refinance will increase your cash flow slightly but may lower your overall return. 

Development will cease, housing will become even more scarce, development will cease, and homelessness will increase.

Unless he increased your income above W2 with positive rental income, which is a very questionable move.Secondly, swinging that much in deductions back and forth is not usually possible, either.

not a realtor, but i am curious. in markets already overly saturated with realtors, why would you want to spread yourself so thin. pick and area and be the best and most active realtor for that area, then increase the size of the area as you become known.