The scariest part is taking on debt at 75% LTV and less than 10% of BAM's money is in the deal.

Taking the higher of the two, that's 52k in debt service for 12 months.

The main drivers1) Local Inventory2) 10 year treasury(macro)3) Personal Debt levels(macro)4) Real Unemployment(not the unemployment number but real white collar job loss ratio'd to part time jobs). 5) Industry proliferation(can't tell me a tech or finance hub moves like a health hub).To tell me #2 will derive from the same inputs as it did in Sep/Oct, I'm willing to bet it won't.

I always make sure that the properties are cash flow positive, but the large bulk of the money I make from them is from the other items (appreciation, debt paydown, tax benefits, etc). 

Probably not, but I felt better having that debt paid off. 

Your 1031 will have to be for the net selling price, not just the amount you clear after paying off any debt. 

If it's a matter of a quarter point but the more expensive debt is with a bank that offers better other terms like amortization and LTV, and they have a rock star loan officer, I'd go with the slightly higher interest rate product.2.)

The other option I potentially see is to partner with someone that has cash and/or better debt/income ratios and partner on the next purchase.

I think what you describe is pretty much standard performance for rental properties if your not paying cash and I am just assuming your putting max debt on them to try to get your return numbers into your criteria..

One of them can move out, but that doesn't eliminate their responsibility to pay the rent according to the contract they signed.