@Shari Peterson does some of that arbitrage stuff and might be a good person to reach out to.In principle, this is the same concept used by people that draw on their HELOC at 4% to lend out at 10%.

CBRE has some good research on this that can be accessed for free on their website (requires registration).That said, you could get squeezed on refinancing but assuming reasonable leverage ratio on your initial transaction and principle pay-down over given term, you are refinancing a smaller balance so even with spread compression you should maintain positive cash-flow.Good luck!!

If they object you'll have to follow the state law for eviction, Even if they do agree in writing I'd give them like less than a week to leave. you'd delay the court action by that but it could work.Yes protect your business and if they have a crime free / drug free addendum that is great, if not I'd recommend it for your property.

I was attempting to address the first question posed by Fred on how to overcome objections. 

Gerry,When you pay down principle with extra cash flow, you are only getting a ~4% return (the loan rate) on that money.You could get a better return putting that money to work elsewhere.

If you cannot find anyone else that has received an exception, at least get your neighbors to state they have no objections. 

I have to buy the property on my own name for option 1, whereas I can buy the property on LLC name for option 2.Does paying more each month in Principle and Interest justify buying the property on LLC name?

Whether you have $40,000.00 or $200,000.00 30% is 30% no matter your principle amount.

Here you can get help for almost everything, from deal evaluating to handling objections from sellers.

From the remaining 70% of monthly rent I deduct the monthly mortgage payment PITI(Principle, Interest, Taxes & Insurance) to determine the monthly cash flow.