I think she was trying to pull a fast one.

Ohhhh I get it now, I was thinking in terms of the current NOI which is 132,000 and with the new 6.6 cap rate she was talking about this made me think the property was going to only be worth 2milWhat your saying is to forget about the old 132,000 annual NOI and now with the increase in rent this would bring my new NOI to 165,000 and with the 2.5mil PP which wouldn't change that would bring it to a 6.6 cap... so the property isn't worth less when I buy it I just get more cash flow since the opportunity to increase the rents is there.Still you can correct me if I am wrong but I think I got it now

At this point, I've changed my mind. 

When I told her this wasn’t allowed, she asked what part of the lease prevented it (there wasn’t anything in the lease that prevented it) …needless to say, I changed my lease to clearly state that each room in the house was single occupancy, and that there were limits on the frequency of guests (you live and you learn).This is by no means an exhaustive list of house hacking tips/tricks, it’s just what came to mind…It’s also worth remembering that, even with extensive preparation, house hacking can be challenging, and things WILL go wrong (e.g.; inconsiderate housemates, broken leases, furnaces that kick the bucket at the WORST possible time, etc., etc.).

My thoughts are 1) I will have a fixed rate and not worry about it changing every 5 years thus helping me control my expenses a little better (of course aiming to secure a good rate whenever the rates hopefully come down), and 2) it will be amortized over 30 years and if I get a good rate, then my cash flow should increase by a decent amount. 

(I understand that lending parameters change when using a business).

It will continue to be rented out because of his location change.

If it would preclude me from doing so, would changing the current Ladybird Deed to some form of trust (revocable living trust?) 

Take demographic changes, job growth, and economic stability into consideration.

It's important to check your investments and adjust to these changes.