I like that it helps them out, but covers our needs as well.

It's supply and demand.Again it's your building so luckily you will choose your tenants screen very well!

My lender has me at 80% LTV, 6.5% interest, 1 pt, deferred interest for first 3 months, and they'll cover 80% rehab.Why would anyone go use private or HML for rates like this?

Maybe even someone who will go 110% to cover rehab, etc.

You ought to be able to prevent most of what you're worried about through screening and regular, open communication with tenants.

Much more hands on regarding training, screening and evicting tenants.

Property info: #1 main residence, current value $1m, outstanding mortgage $400k#2 current value $600kSo, ideally I'd like to have one mortgage for $1m, to cover both properties - as that would mean only one mortgage, only one enquiry = increased probability for approval. 

The rehab costs have far surpassed our budget due to some masked  issues(missing copper lines in walls, dangerous wiring almost throughout...all covered with sheetrock) Also, the city is requiring us to pour new approaches at "multifamily" thicknesses; about $9k worth. 

What happens when the market changes and the rent won't cover the mortgage and anymore and your forced to start using your own money to cover the mortgage and repairs ect...Don't be overly confident or you will fail.

Looks like you've got things covered, but if you need another agent in the mix feel free to reach out to me, my team and I cover all of northern IL.