Going to guess the $797 is rent only, with tenant paying utilities.

You have to disclose all of this when you sell, so you will end up paying your plumber or discounting to your buyer.

both have 5yr pre pay penalty. 

I am in 2 of his deals and both are not currently paying a return. 

You pay 10% penalty plus taxes (lets say state and federal of 25%) - so you are paying $70k in taxes so your $200k is now $130k.

Keep in mind if you buy another primary residence, you'd have better rates, terms and can pay as little as 5% down for multi family up to 4 units.

Unless the borrower is self employed and takes a lot of expenses to show lower income on their returns then it usually makes sense to pay a couple thousand a year in higher interest (you can pay like 4,000 a year in additional interest for DSCR if you are saving 30+k on your tax bill kind of math lol)

What is she doing now in terms of paying for housing? 

I will be managing and will be paying a real estate agent friend to show the properties for me.

People in 1981/1982 were angry they were paying 18% interest.