As such, it is highly recommended that you keep the entity's bank accounts separate from your personal accounts.

If you have a low credit score with a high loan to value on a little loan with a DSCR number that's right at 1.0 or even below, I can see 8.625%.When you say "The lender has also a put a 5 year prepayment premium on the loan", you make it seem like you didn't know they were doing that. 

Quote from @Wade Penner: Your lease specifically states they must give 30 days notice to end a fixed-term lease.You generously offered to let them continue on a month-to-month.

Original asking was $145K but since the condition was not good we offered $125K and landed in the middle.

Any advice is much needed and highly appreciated.

I highly recommend consulting with a local attorney.

Total rents at 100% occupancy across the three are $2900 monthly.I'm thinking because the financing terms are soooo attractive that it may be worth the higher risk that comes with the high PITI?

Again section 8 recipient are supposed to have high barriers to housing such as a permanent disability or something else.

I would keep cash reserves in a money market fund that gives you 4.5%, and take out a 0% interest, 12-month card so you can pay the minimum each month without interest.Would that credit card have high enough limits for 20k? 

Note I am not specifically referring to your BRRRR, but BRRRRs in general in this high rate market.