@Dean Klein  Over the years, we have had similar situations with existing tenants. 

@Andre HoustonCash-out Re-Fi on your existing rentals and leverage the bank money. 

I've heard people talk about getting a hard money lender for this strategy, but I'm wondering what alternatives exist.

Many of the cities on your list are in the Southeast, which is perfect if you want to bet on appreciation but not that great if you want a steady cash flow, if your goal is to generate some passive income target the midwest, and stick to solid suburban B areas, don't make the same mistake as many other OOS investors did chasing high double-digit returns in C-D areas, these returns only exist on paper. 

We're looking at properties with existing illegal suites and converting to legal, or suiting out a basement.

How do you determine whether you are better off rehabbing the existing property vs demolishing it and starting from scratch?

It shows how much demand exists for the operational cash flows produced by the property. 

It is also my belief that many investors do not understand the various investment options that exist and the associated returns especially the risk/return and the passive/return relationships. 

The bed/bath count can also contribute to an increased appraisal if you are able to create such out of the existing space, or do a add on.Hope this helps! 

Period.However, here is what can be different from lender to lender...For example, we will allow a signed letter from one of the existing tenants, stating that they are terminating the lease early and vacating.