You are not paying down the principal balance so if you sell or refinance, the outstanding principal will be higher.

These are all things I would recommend you to put in the legal document.For my situation I’ve offered to pay for large repairs, but that cost will go back into the principal balance. 

Our current mortgage payment (principal & interest only) is around $600, the new payment (p&i) that the bank is proposing is $1100 at 6.5% interest.

I would avoid going to a platform like fiver or upwork for something like bookkeeping for real estate investors.If you are paying someone to do your books and they do it incorrectly, it will cost you more in the long-haul as you need to pay someone to fix it.Bookkeeping for real estate investors is tough as most basic bookkeepers will not know how to record the following transactions1) purchase of real estate(as they wouldn't know how to categorize items such as escrow payments, closing costs, pro-rated property taxes, insurance payment, earnest payment, etc)2) They will not know how to properly record the mortgage payment as it includes principal paydown, interest an descrow payments.

@Spencer MollmanI would do a lease option where they are renting it but no money goes toward principal or interest of the property but give them an option to buy it from you working x months.

I check the SEC, FINRA, ratings websites for inside information on the principals in the company.

I'd be thinking about bringing a declaratory judgment action against BOA asking the court to declare it impermissible for BOA to add the expense to the loan principal. 

If you have another source of retirement income that will cover your expenses, you could always throw it on a 15-yr note/pay extra on principal, so down the road your cashflow from that property will be much more much quicker.2) Selling the property would allow you to take the proceeds from the sale and roll it into a steadier asset, a larger property, or move it into an existing retirement account that you have.

The question is, how do you plan on paying off the principal?

It becomes paramount to make sure you have the best available FHA (or other low down payment loan product) rate available on the market.Additionally, very few want a cashflow negative rental (especially as your first property) but if you can get to cashflow neutral I'd encourage you to think about your return as a combination of four things: cash flow, principal paydown, (potential) appreciation and tax benefitsThe first three can be quantified easily on a hypothetical $600,000 duplex.$0 cash flow + $8,000 principal paydown (rough calc) + $12,000 appreciation (2%) = $20,000Initial investment = 600k x 3.5% + $5,000 closing costs = $26,000So you'll on average, over the long term, even with $0 cash flow generate a return of $20,000+ per year on a $26,000 initial investment.