Knowing that my tenant is moving out I immediately reached out to a friend of mine who earlier reached out to me couple of months ago and was in need of a bigger apartment.He is also on a month to month lease and is required toprovide a notice before 1st of month and he agreed to move on July 1st .

I have been thinking about pulling money out of mine and my wife’s 401k to purchase a another home around $350,000.

I am sure a lot of this has to do with your goals, mine is forming a partnership to leverage capital and time (still working a W2).

Would not mine keeping tenants however one tenant has not paid rent and is not communicating well at all. 

If they want to keep it they file BK.When I started I loved when a borrower would call and say just take house back, now when it happens I know the house mine as well be knocked down.

Those properties are like gold.

I would also live in mine for two years if it was all my own investment.

I'm pretty sure mine has in the past. 

If they have more people than agreed - you send them a bill or you ask them to leave without a refund, if that's what your rental agreement says (and mine does).

I've done this many times myself and for clients of mine and it's worked well for me.