@Tom OchiengI would reach out to a real estate attorney for specific advice on this situation since you already have one tenant who is being difficult.On a side note, when I have inherited tenants, I have been most successful when I have provided longer non-renewal notices, like 60-90 days, and offered to assist with moving costs.

Since leveraging this tax strategy could save you significantly on taxes if you do qualify you might want to seek personalized advice, that's tough to get in a public forum, to avoid missing out or getting audited and failing audit. ...

That means there is not really an effect on the debt to income ratio neither positive (income) or negative (loss) but rather simply making that payment  non issue. 

My non-professional understanding is that those losses can only be used to offset income from that property.

However, if the FHA interest rate is lower, I would still go that route and if rates drop refinance  however keep in mind FHA has PMI for life  Here you go FHA has the self sustaining requirement that requires the three non owner occupied  units to cover the entire PITI which with 3.5% or 5% down is virtually impossible with today's interest rates and price level.

They will also make a rock bottom swimming hole in the stream.  

You can often get better rates with a national lender, but the customer service is non-existent, communication probably sucks, they may ask for the same documents multiple times, etc.

Furthermore you can vastly increase your returns through leverage using a non-recourse loan but that will definitely trigger UBIT but again the numbers can still make a lot of sense. 

You'll have more flexibility with non-traditional lenders, traditional will all follow the same Fannie/Freddie guidelines.

@Roman StefaniwWhen retirement accounts in the US get financing, the loans are called "non-recourse."