And that we had to get a higher return to offer this net return to investors.

According to market data, the volume of mezzanine and preferred equity investments in commercial real estate has increased as traditional lenders pull back due to higher risk and regulatory constraints.

In areas that are very tourist-desirable, like coastal/beachfront resorts in FL tiny homes can provide an alternative to higher priced hotel rooms and attract a younger clientele that is not looking to book the large (sleeps-12-at-a-time) condos.

Given our higher insurance costs (usually 0.7% to 1.0% of purchase price as a rough guide -$291/mo on low end) and property taxes (typically between 0.5% and 0.7% of purchase price as a rough estimate -$208/mo on low end) that leaves only $1489 for Principle and Interest.

I am pretty confident I can fill the vacancy immediately, and probably charge a higher rent as well.

@Robin CastilloLLCs are useful for legal protection, but they require separate tax filing, typically cost several hundred dollars to create, and most non-commercial lenders will not lend to LLCs.Commercial lenders will lend to LLCs, but their interest rates are significantly higher and they require collateral that regular lenders don't.I would not create a LLC specifically due to the issues in getting a traditional mortgage it will likely cause.One potential route though, is to get a traditional mortgage in your name and then assume the loan after a 6mo "seasoning" period with your LLC.

If you refinance you are going to lose a % of your money in refinance cost to the bank and (I assume), get a higher interest rate.  

After speaking with a few friends and realtors, I've been advised that the West End, East Atlanta Village, and East Lake areas hold great potential, particularly for higher rents and positive cash flow (>$2,800+).

I get higher rent than many others but I can tell you why I do.

If based on the inspection the repair costs are higher than anticipated don't worry just tell the bank based on the revised inspection the numbers don't work for you and throw out a new offer to them.As so many have stated, you cannot assign a contract with a bank but that doesn't mean it can't be wholesaled.