Before committing to paying off the property, analyze whether there are ways to optimize revenue, such as better marketing, adjusting pricing, or upgrading the property to attract higher-end guests.Return on Capital: If you pay off the mortgage, the “return” is essentially the 7% interest you’re saving.

Just like in Southern Italy, where houses are sold for as little as one euro, similar initiatives exist in Spain to attract people to repopulate villages and revitalize these areas." the one part I'd disagree with is "many".So why was I shocked then?

This being my first go at this, I'm curious about that building the exit value/attractiveness? 

He believes that area where he will be buying the new homes is going to appreciate and attract more MTRenters, but now, the big difference is that he would now have 3 properties that can go up (or potentially down) in value, go up (or down) in rent, and three times as many vacancies to fill.My back of the napkin assessment is that for only a drop in $200 a month in cash flow, he would control a lot more assets with growth potential and as rents rise over the coming years, the combined rents will increase to a total more than the single rent.HOWEVER.

The cleanest route but the least attractive method for most investors is to have the investor provide debt.

Alternatively, your sibling might use a 1031 exchange to defer taxes by reinvesting in like-kind properties, though this doesn't directly fund a primary residence.Other ideas include leveraging a HELOC on the rental properties for the down payment, taking out a 401(k) loan, structuring an owner-financed agreement, or a lease-to-own arrangement.

Our project management kept everything on schedule, making the property highly attractive to buyers.

THE attractive feature to me of MHP is renting the lots, not renting homes.   

Alternatively, consider bridge loans, HELOCs, or post-purchase refinancing to preserve liquidity.

I imagine other people might have good alternative suggestions too.