I am unable to unlock cash in current portfolio in form of fixed second on current primary or heloc because of my DTI.

If you are unable to make the loan payments or the value of the rental property decreases, you could potentially lose your home.Another risk to consider is that, as a landlord, you are responsible for maintaining the property and handling any issues that may arise, such as repairs or tenant disputes.

One was supposedly on move-in day unable to get into the new house and was not getting response from that landlord - so I got a call on one of my "for rent" signs wanting to just move in that day!

You will also be unable to avoid inter-roommate dynamics since each roomer has a relationship with you and not necessarily with each other - another reason why having a Den Mother on site is essential IMHO.   

If at the end of the Lease-To-Own term, the tenant is unable to get a loan, and if I am STILL wanting to collect a monthly income stream then I would reiterate the same process of putting a Lease-To-Own agreement in place for another 12-24 months to which would keep me from having to make repairs on the property.

The borrower clearly knows you have an issue, and are apparently unable to file for foreclosure.

Month three (this month-June) they let me know they were unable to afford the house and wanted out of the lease.  

Also they do have IGR aerosols (Gentrol) you can buy that can be sprayed in problem areas that will cause the littles ones to be unable to molt (they will die) and the adults to be unable to reproduce. 

It's definitely more profitable on a per transaction basis however it's typically labor intensive on the front end and may require a wider range of skills in problem solving.My observation is that new people who begin chasing distressed property deals are less likely to refer deals to other, more experienced investors for a smaller piece of the profit and, because they are unable to generate a deal flow, ride what few opportunities they have into the ground.

If you are unable to experience appreciation you might miss out on best part of REI, passive wealth creation.