So make sure you're comparing apples to apples

Based on your scenario there is no doubt that you are saving money on interest for your mortgage however I feel to get an apples to apples comparison you would need to run another scenario making it 3 vs. 2. 

You are trying to compare apples to oranges.

Like all industries, our great industry of hard money loans have great people and associations, and we also have the bad apples.

In times when leasing was/can be difficult a yearly lease was a good option to lock down some one .I no longer even do a 2 year lease that can /will back fire if you get a bad apple .In my area leasing a "A" S.F.h  yearly lease is not a necessity but still do it .I can lease a S.F.H usually very quick knock on wood .So I still avoid a month to month use a one  year  lease .

Wouldn’t this process be like harvesting apples from a tree to place in the basket and instead of placing the bad apple (nonpaying tenant) in the bad apple basket (showing eviction on their report) we place it in the basket with the good apples and possibly have a fellow investor come pick the bad apple and be stuck with it?

Commissions are enacted to protect the public for bad apples.  

However, it has some disadvantages.1) it does not encourage investors to invest in intangible assets, such as education, training, R&D. etc Many of the developed countries and high ranking companies (AMAZON and APPLE)  invest heavily in R&D.

Personally, I couldn't care less about Cap rate - that might be a great way to make an apples/apples comparison of properties but for me, it's about (leveraged) cash flow. 

I'd love to own a piece of big apple...Of course, this could be a pipe dream as I can see that there are a ton of investors with hot cash ready to decent like a bunch of vultures...