In effect, you will end up paying tax on your refi cash later on, when you sell the property.

If you do the math, since your borrower is paying interest on interest, it raises your effective interest rate by about a point.

The PMS around here are pretty terrible, I've worked with a lot of the larger ones in Cleveland and I think they just take on more properties than they can effectively handle and don't hire enough additional employees to make it work. 

Byrna    it has an effective range of 60'  Have any experience with one of these?

Sub2 is a risky strategy for a long term buy and hold as the longer the deal structure stays in place, the higher the chance that issues will arise (like issues with the loan servicer, insurance, seller filing for bankruptcy, seller dying, seller realizing their DTI ratio and ability to buy their next property is negatively effected and becoming upset about it like in your case, due on sale clause being called, etc.).

It's heavily dependent on the types of properties and the effectiveness your processes and systems.If you don't have systems and processes in place, you may struggle to manage 30 on your own.

Direct communication with the builder has been the most effective method in my experience.

Are there any cost-effective ways to handle this situation legally?

Which is more cost effective/efficient. 

On the other hand, self-education through books, podcasts, and free resources is cost-effective but requires discipline and a clear plan.