It was sitting for a number of months while we got plans and permits together and then a squatter moved in (I checked on the property every couple weeks and walked in on him sleeping on the floor, scared the crap out of me!). 

With all of the mortgage fraud from a few years ago, you don't want to be a poster child for "we got this person trying to commit mortgage fraud and made an example of him".You made a  one year comittment, unless something truely changed in your situation, you will be committing fraud, say its a gray area, etc etc, you still bought your first property with plans to buy another OO property 7 months later,,,that my friend is clearly fraud.Play by the rules, you will sleep better at night knowing you don't have something "that could be discovered and really screw up your life"

People will always want accommodation, and with the current influx into major cities there will always be a need for a roof to sleep under (especially middle to upper class). 

I'm not interested in "theming" like Star Wars or Disney rooms as my adult kids, siblings and older parents also come stay with us here and they don't need to sleep in Little Mermaid rooms. 

Make the choice that lets you sleep at night. 

Any new loans you get will likely be several % higher.I guess if you sleep better at night with zero debt on your 5plex then maybe that's the best move for your personally.

If you sleep better with car debt off the books, then that has value as well.Good luck 🍀

They say it got so bad they had to sleep in a hotel/out of the house for a night or two.

If they want it that cold to sleep, they can get a window AC unit or a floor AC unit that vents outside. 68 to 70 degrees inside when 100 degrees outside is standard.

I am afraid that this could be disturbing to the other two tenants in the building.