Or paying off my debt, while I provide them with a nice house to live in instead of an apartment. 

That's before you pay any debt service.To answer your question: No, it's generally not a good idea to lose a bunch of money every month.

How much weight do you give to the cash flow benefit of cheap debt when the property is priced above market?

Please forgive the directness of my response.

Any repair issues the new acquisition has you will feel to much greater magnitude due to the property carrying a lot of debt.

Trying to decide if we should use a home equity loan for the remodel, do we need to put current home under LLC to help with debt to income ratio & would that affect getting the home equity loan?

Let’s break this down because there’s a lot to unpack here.The real question is, how well is that debt working for you?

I would warn you though as soon as you give an inch, the next month if rent is not paid on time you may have opened up a door of forgiveness that was not intentional.

Eliminate debt, establish a budget, and save.

The owner does not want to extend the debt for 30 years.