The going rate for a laneway/garage suite in Edmonton is about $200-250k, so I don't think $300k is too high considering you're in Quebec, which I know is not in Ontario ;) Your rent is higher so that helps.

As long as it doesn't effect you or your property directly nothing you can do.

Try a cash for keys, handing them $500 to $1000 to move out is usually more cost-effective than going through an eviction (attorney fee, court fees, bailiff...). 

The first part that they don't tell you is that it's much better suited for lower-priced areas, like the midwest.

I'm ok with this as long as I'm buying below market value in a compressing cap rate environment, I am self-managing effectively and I have enough reserves to cover any cap ex AND a margin call. 

With a budget of ~$400k, we're looking at SFH with basement suites, and plan on living down/renting up (3+2).

Tenant signs the lease and now that is in full effect. 

Note I have been threatened with law suit many times (likely over 50 times - but most have so little merit they are laughable) including multiple times from the same lawyer. 

Would this effect my cash-out-refi ? 

But as someone else said in many groups, make sure you do due diligence on all the cities you are looking to invest in and pick the best that suits your profile, goal, and investment style.