3.)How proven will the property need to be before refinancing into this type of debt?

I would "run the numbers" - two scenarios - status quo vs. refinanced + new property

We are refinancing a mortgage.

But why pay down payment if I am refinancing?

In the last few years I took out a HELOC on my primary residence, used the funds for the down payment on two investment properties, then refinanced the HELOC into a 30 year loan (7/1 ARM) as a second mortgage against my primary res.

I'm happy to pay someone's consult fee if they can help me towards refinancing to a better rate that helps me cash flow on both properties.

During the pandemic, I refinanced some of my rentals into 3% 30 year terms. 

My partner and I put in equity 50/50 and got hard money financing in the beginning to put less down, and then we either refinanced or 1031 exchanged into larger assets.

Do not put rental properties in an S Corp.Generally, you should have an S Corp for flips, property management operations, commissions and any other activities that generate ordinary income.Passive investments should be held in pass-through entities like partnerships.I'm not an accountant, but I have clients and personally had to pay taxes to move long-term holds out of S Corps just to change title (e.g. for refinancing).

The pre-payment option; is my understanding, that the pre-payment option is only executed when the loan is refinanced or the property sold.