The older aged condo market is tough with so much new supply coming online and breaking ground. 

Contact the tenant, have a conversation about retaining a portion of the deposit (probably going to have to cut them a break), get them to agree, put it in writing for both parties to sign, and send them the remainder.

Consistent with our strategy to identify and break ground on multiple sites, we continue to evaluate other locations in Arizona, California, New Mexico and Texas.

My taxes are overly complicated and worst of all these houses really only break even for us every year.

i will still BRRRR if I can get most of my capital back and break even. 

As pointed out by others, the costs to refi along with the penalty, will take a very long time for you to break even.  

Around year 3 I will start breaking even after rent increases and refi.

I believe the pay system we have is fine,  Lets break it down to someone who make 100K a year.  

How do you break the news?

For supercharged cash flow I like this rule of thumb as my #s seem to flesh out well w/in these margins:1BR under $100K2BR under $200K3BR under $300K4BR under $400KMaybe you can go up a notch on each if you want to break even w/cash flow...so to each his own w/that.Of course if they are being sold furnished / turnkey, I'd add in $5-10K of value (depending on how nicely furnished it is) per bedroom.