Most Medicaid communities aren't nearly as nice as private-pay communities so if a senior can afford private-pay, they will almost always want to go that way instead of trying to qualify for Medicaid.Secondly, how does escrow benefit you? 

You mentioned you seem to think this is a new regulation across big lenders, but aren't you working with a local bank?

I’ll add that you aren’t going to move the debt to the LLC, that’s going to still be on you.

Additionally, while rates aren't historically bad right now, they are higher than 4-5 years ago, and they will be even higher for you as an investor than they were as an owner occupant, which is what you were when you bought originally.I get that you are anxious to add to your portfolio, but that could be achieved without touching your first golden goose.Sometimes on BP, the push is to leverage every last spare penny, but that can be a risky game as the markets shift. 

Educate yourself on the local market, network with other investors and agents, and always have a solid plan in place before making any investments.

@Beau Wollensjust curious - why aren't you being "allowed" to do an inspection? 

You can start to educate yourself on the individual components; how much does it cost to paint on a per sqft basis or what is an average kitchen remodel.  

But ya have to make some educated prognostications in life.Add this to the information your processing - What your talking about doing is eliminating around $4000 or interest expense (which is deductible anyway so really could be a real impact of eliminating $2800 or so) of debt in exchange for paying over $10K in capital gains tax (don't forget possible state gains tax as well).  

The wood floors were sanded and poly'd before she moved in and they've been sanded so many times over the years, the boards won't hold up to another sanding, even though the scratches aren't deep. 

If the numbers on your rental aren’t great yet, maybe another purchase isn’t even on the radar right now.