This will reduce your rental income and may even generate a rental loss.The article below provides a good overview.http://www.nolo.com/legal-encyclopedia/tax-issues-when-renting-out-room-your-house.htmlCongrats on the first property!

If the value is more than that, the excess reduces your parents lifetime gift limit.  

Equity costs you money...unless you access it, by selling the property (then you're starting all over again), or refinancing (which gets part of it out, but may increase the cost on the property too high and make the little "cash out" you get at closing not worth the cost each month in reduced cash flow.Try this.  

What I've done, however, is reduced substantially the ability of knuckleheads to sue me personally through the LLC. 

If market rent did not increase with the increase in the property's appreciation then a refinance may reduce your cash flow and, by association, your cash on cash return.In this scenario, it may be prudent to sell the property to extract the tied up 173K in equity and accept that you've made 273% profit on your original 46K down payment.  

Find out which expenses can be cut or reduced, then pay off those credit cards one by one pay off the one with the smallest balance first and so on until all of them are paid off.

As a result I found that it really pulled me down and gave me a lot of anxiety, to the point that I procrastinated listening to massages over the past month (not a good business practice).

Seems like you already offered to do whatever you can to reduce noise - I'd let them fight it out. 

Buy the mortgage at discount and reduce the payments.

I have 2 other properties with fixed 30 year debt on them and both producing good cash flow.My Question: In a nutshell option 2 allows me to put less down, increase cash flow, and reduce interest rate risk.