. - Rehab financing is less of an issue than take-out (permanent) financing here.

I think we need to keep blaming the landlords and introduce additional rent control legislation to fix the issue. 

Sounds like a hard money lender that wants to take a property from you when you default.There's a lot of issues here starting with a guy that will loan you money and once it gets difficult wants you to abandon ship- red flag.There are a lot of unknowns here but trying to dump it seems like a 100% guarantee to lose money.

That's a common misconception, especially for new investors.

I know it is "working fine" for now and there's no issues at this point, but I will be replacing it within the next week. 

Unfortunately, common spaces that you use as part of your personal space can't be included in the rental portion calculations. 

They will break.We have used appliances in most of our rentals, and they have all lasted longer than 3 years so far with no issues.

The best way to answer this question is to look at the square feet of the home and how many can comfortably fit in the common areas...i.e. dining room, living room, outdoor spaces, etc.

If I'm going to have an issue it would be now. 

One thing to note is by paying it down, it can hurt liquidity so if that is an issue, keeping it in a bank account would be a better bet, but if liquidity not an issue, then I agree 100%