This will reduce the number of inquiries you actually authorize. 

The entire net profit would then be applied to the HELOC thereby reducing the outstanding balance and further reducing our monthly payment.  

Are there any clever and LEGAL ways to reduce the tax bill that you would recommend?

On paper it's a great way to reduce overhead and drive the bottom line (as long as you're not holding too large of a note).

I have a Navy Federal Credit Union and Pentagon Federal Credit Union credit card.  They both seem to run the same yearly reocurring balance transfer promotions from 0-4.99% interest with no balance transfer fees for 1...

Principal is not an operating expense, instead, it reduces Loans Payable.

I did want to point out that I wouldn’t call it useless as you are spreading out an expense over multiple periods which can quite powerful in offsetting future returns and thus reducing taxable income.

You continue to pay the $1,000 payment you’re accustomed, hence an additional $500 towards principal reducing the total interest paid on debt.

Unused contingency funds, unless they were received directly from the borrower, must be used to reduce the outstanding balance of the renovation mortgage after all of the renovation work has been completed and the certification of completion has been obtained.The loan is not re-amortized.Draw Schedule: HomeStyle program has a maximum 4 draw process.The initial draw can be up to 25% of the total project and can be for materials for the project.The final draw will be at least 10% of the total project as retainage and funds will be released upon receipt and approval of final inspection, Certificate of Completion from Appraiser, signed All Bills Paid Affidavits and Lien Waivers.Additional Draw Information: Signed Draw Request by borrower and contractorSigned All Bills Paid Affidavitreview and approve the draw request and will release funds for disbursementA check will be issued in the name of the borrower and contractor and delivered to borrower via USPSAn inspection of work to date will be performed at 50% completeFinal Draw Information: Signed Draw RequestFinal inspection/Completion Certificate will be required for release of final fundsA Title Update showing property free from lien or encumbranceGeneral Contractor’s Lien Waiver AffidavitAffidavit of Completion will review and approve the draw request and will release a check in the name of the borrower and contractor.Change Orders and Cost Overruns: Changes to the initial plan are not permitted unless prior approval.

You do not need to give a specific reason for doing this, just let them know that at the end of x month that they will no longer be able to live there....However, if this tenant has been; long term, hassle free, and prompt with their payments, maybe you need to reconsider moving them out as you may find the loss in this cash flow to put a hurt on your income.I would say a good compromise would be to see if the tenants want to upgrade to the bigger unit, where you being the kind landlord offer a "reduced" price to them.Ultimately it is your decision, but be sure that your decision is not based on emotions but rather simple dollars and sense.