You should find out what percentage of the rent is being paid by S8 and by the tenant.Tenants have to sign the rent increase and some won't because they don't want their payment portion increasing.It's also highly unlikely a S8 office will approve the huge increase from $797 to $1300.- BTW: the $1300 includes all utilities being paid by the landlord.

It will give you a lower interest rate on both properties because you bought them as owner occupants, and it will require less down payment to get into. 

QB really is not made well for landlords and landlords leave QB every day for better software, payment processing is really expensive, and with QB there's no tenant portal for your tenants to schedule payments or push maintenance requests. 

@Marcos Carbi  If you want to allow a payment plan, Tell them this is the best I can do:Pay $xxx cash by tonight at 8pm for November's rent. and then beginning Monday Jan 20, pay $450 each Monday (in cash?

This felt like they were turning me into their money-making machine.If they’re charging $10K upfront, plus $200 per month, and taking 50% of the profits, why aren’t they putting in 50% of the work or covering 50% of the down payment?

If you have extra cash at the end of the month, then do double up payments on the mortgages so the principle is reduced and this will increase your heloc room.

For example, the buyer, if they find problems with the property or stop making payments, can blow up the seller's credit.

I think this is the method I would like to go as it fits in line with what I envisioned. 

Low or no down, seller financing and low or no interest with a balloon payment later is the holy grail (location, building condition, market also matter but it sounds like you have all that).

The deduction is optimized as values increase and can potentially offset the entire net investment (including down payment) for high wage earners.