Also, the 15 year mortgage idea would eat up all of my cash flow and while that will pay down the loan quickly, I prefer the cash flow at this stage.

If i have to reduce price to 1.18, should I sell and eat the loss or should I refi ti standard mortgage of 940,000 (4.5% interest) pay off first loan, and hold and rent?

Personally, we don't even use one of the closets and both rooms are almost too large as we have a lot of empty open space that feels somewhat awkward, though it is nice not to feel cramped, don't get me wrong.I've thought about taking out one of the closest and eating into the space of both bedrooms to add a third bedroom.

I spent 15k on the renovations since I don't mind eating the time spent fixing since I paid in cash anyway.  

The point is, to be most successful you can't just hope to withdraw all those eggs from one basket at retirement.

So that would eat into that security deposit.How would you negotiate going forward or would you give it a little more time before responding for her to let what she said sink in....?

The stakes are higher (ie higher loan balance, more management intensive) with larger properties (ie 5-50 units) so imo it makes a lot of sense to start smaller and build from there (knowledge, contacts, etc) then when you have a solid base you can cash out refi or 1031 those smaller properties and roll them into larger ones down the road rather that having all your eggs in one large property to begin with (ie sink or swim).    

Term might be shorter and rates might be higher.2) The blanket loans essentially put all your eggs in one basket, so if one property goes south and hampers the ability to service your debt, all properties under that loan are at risk.

But seriously, the countt eats all profit.

It seems like it would be putting all your eggs in one basket.