You're going to lose your loan from what I understand.

@Stuart Udis I understand the importance of having the funds for repairs, vecancy and any issue that may happen.

Also know that you can't necessarily trust the NOI as presented, you must, must, must run the numbers.Here's a good link to start understanding the basics:http://www.noneman.com/pdfs/White_Paper_Cap_Rates....

This does not involve the utility company meaning that you will still have to go into the property, read the meters, then individually bill each tenant for their usage and understand the bill is still in your name.

From my understanding, it might be more advantageous to refinance as a rental property at a lower LTV with income from two units, rather than as owner-occupied at a higher LTV with only one rental income considered.

Verifying last 2 years of rental history and income extremely important to find the “best of the worst”.Make sure you understand the Class of properties you are looking at and the corresponding results to expect.

From what I understand, a 1031 exchange doesnt apply in this case, and so I will have to pay short term capital gains on the appreciation ?

You don't need to know everything to get started; you need a foundation to build on, and the rest will come through experience and then refining your education.You can build a basic understanding of investing in 3-6 months.

You don't need to know everything to get started; you need a foundation to build on, and the rest will come through experience and then refining your education.You can build a basic understanding of investing in 3-6 months.

@Sharon Porter,Investing in a state-controlled property like this can be an opportunity, but it's critical to understand the legal and logistical nuances.