Hard to say right off the bat which is a better option since it depends a lot on what you are looking for and your situation but speaking with a lender that understands the application of primary residence loans in multifamily will be important to help you find the right option.

Even if you can find an edge in short term maneuvers, you'll almost certainly be better off in the long run if you can figure out a way to keep these current properties (especially at 3%) and fund the bigger, better property either through partnering, syndication, f&f loan, etc.

I paid this mortgage off years ago.22. 

Off street parking, quiet dead end street.

I was wiped out as second lien holder which got me to thinking about legitimetly becoming a private lender.My question is if I already make 7.5% off a few of my 250k condos, then how does private lenders (not hard money lenders) make money off charging 7-8% returns when they can just purchase condos in cash for the same CAP rate?

Sounds like you are off to a reat start.

Don't get scared off by some attorney. 

So when you sell the asset, that payoff is in the loan file and title company knows to pay that off and pay you the gravy. 

We are now in a position where we have 4 investment properties completely paid off making us money and I have a high paying W2 job that allows us to feel comfortable enough for him to quit his W2 job and start investing in real estate full time.So my question is… where can we go to get advice on how to move forward with this in regard to the best way to structure our growing real estate rental business?

Perhaps could argue you had to relocate for work and write off some moving expenses...