The refinance does not trigger an increase in assessed value.#5 Property is cash flowing much higher than my estimates, and in a B+/A- neighborhood (see below)So for the numbers, I am still refining our pricing strategy, but so far I am seeing ~$4,000 in gross revenue per month on the entire property. 

So the too big house method puts you in a good location, increases your choices of where to buy, and potentially has higher rental income and appreciation.

The reason is I know which lenders:do a good jobstay on top of the necessary tasksknow how to be creative within the rules (some people don't fit into the standard mold of a buyer, and some lenders don't know how to get them approved, and some lenders know how to get them approved)and which lenders can actually close deals.Another reason is, as someone like you who wants to house hack, not all lenders are experienced in it.

Just after, the book talks about improving the property so rent brings in more money per month/year, which increases Gross Rent Multiple. 

They also do dove tail drawers and soft close drawers/cabinet doors which are pretty much standards for cabinets now days.

@Arsene Remy No this is standard homeowner's insurance post construction.

If you gactor in that rents should have increased over 5 years you can use that to offset even more without cutting into cash flow.That being said, I have started to make extra monthly payments towards principal on the notes that will come up in the next 3 years for refi, which will bring the baloon amount down significantly.

Our home value has increased by about 50% per Zillow and Redfin estimates.  

I have been in similar situations and have rarely had anyone move out because of the increase. 

Try your very best to cut unnecessary costs and increase your income.