At this level of scale, it is almost the same as running an extra unit.

Potential solutions include federally backed loans with lower rates or tax incentives to help offset the cost of a new mortgage, encouraging these homeowners to sell to new owner-occupants.

Since the previous owner is getting most of the proceeds does the closing attorney issue him a 1099S and then issue my company one for a much lower amount?

My goal is to diversify with an investment that generates steady cash flow, even if it requires a larger upfront investment and lower overall returns. 

and 5 years is a long window for things to change in ways we don't expect (lower interest rates maybe??).

The rental market is expected to stay flat or soft through 2025, then is estimated to start appreciating again once the new supply of multifamily housing reaches traditional occupancy levels.

I've had them long enough to keep pushing up rents so that I am at the top of my niche, but know not to exceed it because I'm just about at the point where if I raised rents another $50-$100 I'd be crossing over into the lower end for larger units.

Can you do the lease renewal, but have lower rent for the first month and then increase it the second month (if that fits with 60 days' notice)? 

You profit share with them for the first 10 deals (at the higher levels) because they really are right there with you holding your hand, and as I mentioned, doing three way calls, etc. every step of the way.  

When they complete this you'll receive their credit report, and a background check.From there you'll have good insight to their 'level of fiteness' for your property.Shahin