The below terms are live as of this date, for a rate and term refi (no cash out).From left to right:Points: 1, 1.25, 2.Prepayment penalty: 10 years, 3 years, 5 years.Commentary/review, hopefully this thought process is useful when evaluating offered terms for a maturing commercial mortgage that needs to be refinanced. 

Chicago is a city that can be tough on landlords - I have had bad tenants and the process to evict them is long and straiieous.

In the process of using a quitclaim deed to put it under an LLC and empty the property of personal belongings. 

The squatters would have to go through the legal process, which they won't because they know they have no evidence of legal occupation.The worst that could happen is violence, so you should only attempt this if you are prepared to defend yourself. 

During rehab process the bank sees us with; 2 mortgages, 0 rents, and 1 income (spouse not working) and would be too risky. 2 mortgages will make us at borderline break even cash flow with existing income.

I'd be open to a month to month lease, but I'd still have them go through same screening, same deposit process, and same rules as other tenants.

That can lead to odd quirks, sometimes good deals, and sometimes long and arduous processes, it just all depends.I will share a story - one Credit Union was offering such attractive HELOC terms that Auto Dealerships caught on to it.

A lender I'm currently working with said their underwriting process is taking 60+ days right now and he started me almost 3 months out.

They then finally turned in the schedule c over a month after the deadline, which I couldn't even utilize as my independents had already filed and would not go through the process of paying extra to their accountant to amend the filed taxes.

You'll need a lawyer to generate the paperwork and filings and experienced enough to give you general advice on the process, help you establish appropriate compliance and back office procedures.