Based on your post it sounds like you are interested in retiring but would prefer to maintain a similar lifestyle in the same area.
1) +1 for selling your rental property. Based on your description the property is not cash flowing even though you have some equity in the home and you do not seem to be budgeting for vacancy or maintenance. Relying on continued property appreciation to make this large investment profitable is not recommended as you cannot rely on this windfall (I know prices have skyrocketed in your area but that means you have substantial risk of prices falling too). Finally, if you are looking to FIRE you need assets that produce money, not ones that might produce money in the future.
2) Your expenses are high, even for the fat FIRE crowd. I am curious what they look like without rental expenses (I would track these separately as the rental is at least paying for itself).
a) Take advantage of living somewhere that is beautiful every day:
Utilities: 600 - what the flipity flip are you spending 600 a month on when everyday is 65 degrees?
Gym membership : 260 - When it is an option in sunny, comfort I find outside a way better place to get exercise than the gym
Have a garden; have your kids help. Delicious produce to reduce your bills and a family activity in the Cali sunshine.
b) artificial suffering makes children into better adults
I appreciate the desire to give your kids everything when you can. Hopefully, these two will be the best 2 things you do with your life. That said 7 and 11 is basically old enough to look after themselves (when together). To the extent $1500 a month is just supervision consider giving this up no later than when your oldest turns 12. Providing your kids with less stuff, that is less fancy, and making them work for some of it will be a pain in the butt for you and your wife, but it isn't to save you money (even though it will) it is to help give your kids the same foundational values that you grew up with that made you smart, hardworking, and charitable people.
c) Don't be wasteful: Eating fancy food is a good time, but I cannot fathom a $1200 grocery budget + a $1,000 restaurant budget that doesn't involve considerable waste. Start working these bills down first by planning to avoid throwing food away. That doesn't mean rigorous preplanning of all your meals. Just make sure you eat up your fruit and veggies before you go out and buy a bunch more, and put leftover meat in the freezer long before it goes bad.
d) Make sure you are taking care of your current largest asset. $300 sounds like a tiny sum to budget for home maintenance for a 1.9M house. Maybe you are surprisingly bigtime DIYers, but that doesn't seem to be the case.
e) Drive less. Driving isn't fun (at least not commuting and shuffling kids to activities ). $300 in gas seems like a lot of miles even if you drive gas guzzlers. 300/$3 per gallon *22mpg = 2200 miles per month. Figure out a way to get out of your car. Maybe that is moving closer to school/work, maybe it is telling your kids they must find a car pool buddy for any of the $1500 per month in activities they want to keep up with. (Making kiddo find a car pool buddy is one of those great character building shyness/discomfort getting over experiences.)
f) Be an efficiency minded and paranoid crazy person. I'm not sure what the $300 a month personal care is for, but getting your nails done is gross. I know some places are better about sterilizing tools than others. But nobody is sterilizing nail polish between customers. Chances are somebodies toes were full of fungus earlier that day
http://www.berkeleywellness.com/self-care/preventive-care/article/lowdown-toenail-fungus. Also, if you are an impatient person cutting your own hair is an absolute joy. No appointments, no waiting, no chit chat, and the salon is open 24/7.
The advice boils down to think about each of your expenses. They can all be cut, but you should be able to find thousands of dollars that will be happiness neutral or even happiness increasing. The above has 6 ideas, hopefully a few work for you and you can find a few more.
As far as the specific questions: When can you FIRE? It really depends sometime between now (if you think you really will sell the rental and start your own business) and when you have 5M in invested assets.
Any tax tips? (1) Do a backdoor Roth IRA. (2) With the new tax rules (24K standard deduction, no personal exemption, 10K cap on state and local tax deduction) figure out if you will still itemize every year. With the huge mortgage, I suspect you are still itemizing annually. But if/when that changes take advantage of your generous hearts and open a donor advised fund so you can make several years of charitable donations at once and then take advantage of the new large standard deduction in non-charity years.