I can’t think of any better way for young people to prepare for their future so early on in life with so little cash out-of-pocket.

The snapshot of their life that you saw looked perfect, but I doubt it was.  

Whatever information you get, try to validate it with real life experience!

(I'm progressing on goals in all areas of my life. 

They apparently were not worth saving and had reached the end of their useful life (the ultimate depreciation) and actually were some expense to dispose of....meanwhile, all the single family homes and multiplexes have appreciated handsomely and still generate rents....

I'm ruining everyone's life. 

You are the landlord here and they are new tenants and you need to set the tone for how this relationship is going to work RIGHT NOW or you are going to regret ever letting these people move in because they will be running your life for the next year they live in this house. 

When I refi'd it was because I'd save $90k in payments over the life of the loan.  

Not a lawyer or anything, so I'm sure someone else can explain more on differences if you have a chance of life event or something, but this is is straight from the 92900B that you will sign in an FHA purchase loan:"Do not falsely certify that a property will be used for your primary residence when you are actually going to use it as a rental property""Penalties for Loan Fraud: Federal laws provide severe penalties for fraud, misrepresentation, or conspiracy to influence wrongly the issuance of mortgage insurance by HUD.

As a result I have had a life long interest in learning about nutrition and maintaining health.