Quote from @Erick Pena: A "good" rental property is one that covers all expenses (mortgage, taxes, insurance, maintenance, property management fees, and any other costs) and still leave a surplus (commonly referred to as cash flow).Calculate cash flow as: Cash Flow = Rental Income − Operating Expenses − DebtThere's much more to it, but that's the basic idea.

Here are some thoughts on your choices:401k Loan: This can be a good option since you're borrowing from yourself, but it comes with repayment risk, especially if you leave your job.

My worry is that since he has built a 16 year track record of always paying his pref and returning capital on time, that he is now overleveraging.Does anyone share this concern?

Typically those purchasing cash aren't inspecting every home, they're walking it or having their go to GC walk it and already know what they see that may be a concern. 

I am ok and usually do leave some of my money in a refi.

My monthly payments (mortgage, insurance, taxes) are roughly $3,600, leaving me netting about $4,600/month.I have four years left until military retirement, after which I’ll have a pension, some disability income, and rental income from this property.

The truth is, they will keep playing games and milk you for every penny they can, then they will leave the house a mess and cost more with cleaning, repairs, and vacancy.

My concern is whether I’d then be locked into only larger deals in the future. 

This leads me back to my mother, as she approaches her end years, I hate to think about this, but she wants to leave my sister and I one of the houses I mentioned earlier.

We are concerned with where interest rates might go in the next 7 years.