Thanks for the input everyone. I worked it out, felt it was best to sell mathematically, and then despite that stayed where I am. Rebel Spy, you are a wise man.
Ironically, I came back to a series of posts about downsizing to a smaller home which I will definitely have to consider.
To address the ideas raised:
I would love to find a real estate investment that follows the 1% rule, but in my local market I have not seen any for years. I have looked for duplexes and multi-unit properties but if and when they came on the market they were snapped up before I even heard about them, or were ridiculously priced and my "lowball" offers got refused.
Where do you find these properties? I just read the recent post about how to buy a house and I have also felt the pain of losing out on a great deal by a few hours. Perhaps one day I will find one of these mythical underpriced properties that pay for themselves and when I do I will keep my unicorn there in the backyard...
re: fixing up a rental place myself
Perhaps the younger me could have managed it, but right now one business keeps me fully occupied. I would never get things done in a reasonable timeframe on my own, so I would have to pay someone for every little thing, which is not likely to be worthwhile. A multi-unit rental would be more worthwhile, because I could then use my existing staff or hire additional staff to deal with those problems. (Oversimplifying and setting aside potential issues about getting into unfamiliar business territory)
Definitely an option for those that are working jobs or working on a consulting basis though, and probably an option for after I "retire".
re: financing of real estate purchases
I find it a bit difficult to amortize big ticket investments such as real estate or major equipment because in my experience business profits are volatile. In the last 5 years, my corporate self has ranged between +400k & -160k annually. The best approach I have is to control my personal expenses in good times and bad, hence the reason I check out this blog. So practically speaking for real estate I now pay cash or don't buy.
I have used the HELOC to cover salaries and overhead in down years, and I can state that it will probably never be used again because:
a. I value sound sleep.
b. Using your HELOC to fund your business while you're losing money is a hair on fire kind of emergency.
Specifically regarding using mortgage or HELOC financing:
I don't think I would qualify for a useful mortgage, because I draw a minimal salary from the business and therefore on paper I look like I can't afford much. I can borrow at 3.59%, but I max out on the total amount at just under 120k based on debt service ratios and my official income. Ironically, I am better positioned to pay back a mortgage now than when I first bought the house. This may be an issue for others on this site that decide to move or want to finance an investment property though.
I could issue myself a dividend whenever I need money, but:
a. it pulls capital from the business.
b. taxation issues arise.
c. there is no point since thanks to MMM I don't need a huge salary to live well.
as an aside/FYI: Unsecured business credit is tighter than ever right now. I can currently borrow up to 700k at 8.59% on the corporate account which would be utterly ridiculous if I actually used it. (This is one reason why people use lending tree, prosper, etc., or even hard money lenders)