Curious how the 'mechanics' of a transaction like this work.

Well Chris M. guess with the non-commercial, My gripe is that I would expect to get a lower down payment, but when they classify my property as commercial, that seems to automatically require 20-25% down.Julie Marquez that is good information to think about and I will certainly ask the question next week, if for no other reason than to present as an knowledgable investor.

I would remove the table and add lower cabinets /counter tops along that wall under the window.  

If you think you can still find a quality tenant at 2200 a month and it will not take you more then 1 month to find then advertise it at 2200. if after two weeks you are not getting quality applicants I would lower it.

Since I refinanced to a much lower rate, I am leaning toward paying a smaller amount to extra principle each month to save the rest for an additional purchase.  

@Andrew R. the NRW 91-01: Withholding on Sale of Real Property by Nonresidents is a good link - I went to bookmark it and found I had already done so in 2012 :)My understanding is that it's "withholding" meaning the seller may get some or all of it back once s/he/they file a tax return in Rhode Island for that year.Also a close reading mentions a possible exemption for sellers 55+"In the event that the sale of the property by a nonresident will not be subject to tax under Sections 121 (One-Time Exclusion - Over 55 Principal Residents)... the nonresident seller must make the gain election and file the RI Form 71.3 Election even though no withholding need be made""If the property Martha was selling was her residence and if she otherwise qualified and intends to treat the sale under Section 121 of the Internal Revenue Code (one Time Exclusion Over 55 Principal Residence), she would still have to file the election form 20 days before the closing but would complete the election form and use the special types of transactions area on the back.

An all cash, no loan transaction).For this reason, I calculate both cash on cash vs. total yearly return on my out of pocket money (which includes the down payment).Also note that usually you pay the first month of the mortgage in addition to the down payment, plus the whole of the insurance and (some) taxes at closing.

Trying to hone in on one area in the country that has good cash-on-cash value + solid economic engines + good neighborhoods (for lower headaches, obviously).

I think this would be on the lower end of rent at least for the time being.  

So the bank gives me a mortgage on the house an I use that money to pay the lender back an now have a much lower interest on my money.Am I missing anything.