She did provide a doctors not, and the Drs. note literally says "To whom it may concern, tenant has a pet dog for mental health reasons." 

Dilemma is that: 1) Leave the property alone as it is paid off and my cash flow is better but Cash on Cash return in low or 2) Take the money out and my cash flow will decrease but Cash on Cash return will be higher and I can invest the money in some other deal.

Hey @Federico Dayan, I was facing the same dilemma when I was living in Miami and I decided to buy in another state first.

I'm currently working with a lender to get pre-approved for a physician's loan, if there are any health professionals or those familiar with this on here would love to hear your experience/thoughts on this. 

Should be framed as a health and safety based eviction as opposed to failure to pay rent.

We plan to refinance anyway with cash out or not as it will lower our interest rate, though the cash out option will have 0.125% higher interest rate than the non-cash out option.Our dilemma is should we do a cash-out refinance or a regular refinance for now?

I would like to get into commercial investing, while working full-time in the health system. 

@David Garcia My wife and I had a very similar Sell/Keep Dilemma, and we decided that keeping the property/cashflow while retaining access to equity was the best of both worlds.

If builders and owners were equally concerned with health and safety as they are with profit, there would be fewer "heavy handed...restrictions" and the construction industry would be allowed to self-regulate. 

Given that they have lived in the unit for over 10 years and their mother lives there as well, this option may not work though because of the following RSO guideline:"If a tenant lives in an eligible unit but has continuously resided in the unit for at least ten years, and is either 62 years old or older, or is disabled as defined in Title 42 United States Code Section 423, or is handicapped as defined in Section 50072 of the California Health and Safety Code, the tenant is protected and the landlord cannot evict for an owner, relative, or resident manager move-in."