Duplex

I wrote out a longer comment but it keeps deleting it…

I would suggest starting an LLC - selling the properties to your own llc and use a 1031 exchange to get into a new property.

Depreciate your assets on the books / loss carry forward / back

That way you maintain ownership and you have more things you can write off.

Newer properties with less headaches can be self managed personally, older properties that need more management you can hire out and expense as an llc

How much is your actual/pure cashflow with both sides rented? Many people think of cashflow as gross rent minus mortgage (which includes principle, interest, taxes and insurance) but it's not. Actual/pure cashflow is rent minus mortgage, vacancy, property management, repairs and capital expenditures (roofs, appliances, HVAC system, etc). If you're not counting them already, a good starting point is 8% of monthly rent for vacancy, 5% for repairs, 5% for capex and 10% for property management. Some people say they don't count property management because they manage themsselves, but the day may come when you either don't want to manage it yourself or you can't and would have to get professional management, so you always want to factor it in.

Since I don't know what your actual cashflow is for the property, I'll assume that both sides rented and factoring in all expenses it is $300 per month for the property. You currently have $105k in equity assuming a $175k valuation and you said you currently owe $70k. That means at $3,600 in pure cashflow a year you are only getting a 3.4% return on your equity (ROE). To match the S&P500 at its historical average of 10% per year, you would need to be getting about $584 per month in actual cashflow.

I love real estate, but if you're not making at least $584 per month in actual cashflow, your money is best served invested somewhere else. I would say sell it and redeploy it, either in another property where you can get the cashflow you need or place it in an S&P500 index fund. Especially considering what you said about the effort you have to spend to run it/part of town it's in, etc., and that in an index fund requires no effort.

As for seller financing, check with your lender, because it's almost always required the property being sold is completely paid off, otherwise you could trigger the due on sale clause making the full mortgage balance ($70k) due immediately by you. You're describing what's called a subject-to sale. There is no way to transfer the mortgage to them.

I'd say only keep the property if the expected stress will be much less than the expected ROI.

For the prospective tenant to get clear title in an owner financing deal, my understanding is that the property would need to be paid off. That is, unless you make some sort of arrangement for them to pay off the $70K that you still owe. You mentioned multiple times the large capital outlay to renovate the other side. Sounds like that, along with the travel now make it prime to offload it. Just my 2 cents. If you can find a buyer, whether it be the tenant, or better another investor to buy it for $160 to $175K then go for it. Using the 1% rule, which is of course just a quick gauge, one would want $1,600 to $1,750 per month to make it worth their while, not $1,235. The other option, although not a great one is to find a property manager that could help you. Passive income, right! :-D For reference, 20 years of managaing our own units, up to 20 doors, including short term rentals. It's not for the faint at heart!

I have been in real estate for the last 10 years in Michigan and I am selling almost all of my properties. I got up to 17 units plus 108 self storage units at one point but the return lately has been getting worse and it is a almost like a full time job. I am looking for my passive and higher returns in other asset classes.