Unless the borrower is self employed and takes a lot of expenses to show lower income on their returns then it usually makes sense to pay a couple thousand a year in higher interest (you can pay like 4,000 a year in additional interest for DSCR if you are saving 30+k on your tax bill kind of math lol)

I would suggest taking the route of option 2 or 3, so not only are you saving over 10k in rent per year but the residents help in paying down the debt.

Stop hanging out with your deadbeat buddies who spend all day drinking, talking sports, and otherwise wasting away.

Having owned property in rockford its not a great appreciation area so getting a HELOC will probably take 5-10 years based on loan pay down and maybe some slight appreciation.

There are many reasons why I haven't pursued the arbitrage model, but mainly that it takes too long for the ROI after investing all your time and effort into buying furniture and renting and paying utilities.Let's say you rent an apartment for $1500 and you spend $7000 to furnished it.

There are good deals in all of them

That would take 2.5 years just to break even.

It's just going to cost you quite a bit of money to have your accountant prep all of them.

-While rent would be more expensive month by month, the idea of being able to take my equity out of my home and also being able to reduce annual repair costs, property taxes, etc. does seem appealing to me. 

All well and good.