Some of that would also be used to pay the ~$1500 in closing costs on this new loan.I understand that this increasing how much we are leveraged greatly(by 34k). 

Your number one priority should be increasing your income.

When you rely on outside help that may or may not exist, you increase liability.

I drove to the property today and the houses in the area were pretty nice, which gives me more confidence in the town in that it does not appear to be dying.

Also the property taxes in El Paso increased by almost $400 and that’s another reason that I’m paying too much.

@David FriedmanYes you are correct, it is almost like a reverse mortgage and yes there is a huge element of speculation to assuming a 2% increase in property value for the next 30 years (although it is in Irvine near the University!).

Since their lease expired 5 & 9 years ago(2 separate unit), can I file application with UC township to catch up previous rent increase ( average 2%-3% CPI Consumer Price Index increase)?

But I'm confident I would get a tenant that would move in by the first of August, probably sooner. 

Make sure all costs are passed through to the tenant, including all permits and approvals, maintenance obligations, tax increases, etc.

However, that doesn't increase your chances of getting the house, and makes for an awkward transaction.