Tack on late fees and accrued interest and every day it will be costing them significantly more money. 

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The money they had was sitting in a savings account accruing 1% interest per year.

When you get your fourth SFR, trade up to a bigger deal with the equity accrued. 

We accrue our rental income in a reserve account that is used to fund repairs and make future investments.

Reason for mentioning single story 4plex is to have the ability for tenants to pay for water/utilities vs. it being an extra expense I accrue.

Having a single fee that the tenant knows they will pay 'sometime' means they accrue that fee and now have license to not pay the rent until they want to.

I would think about this in terms of whether or not you can get additional streams of income faster than your money can accrue interest?

In addition, I had to pay an additional 1% down payment so that there was time for the loan to get transitioned to the final lending institution before interest accrued and exceeded the max approved credit limit before I had a chance to make a payment.

Unless you have access to outside LP equity (not mezz or high interest accruing pref equity) that is closely aligned with your objectives my advice is to stay the course.