When we finally move to SD permanently  I plan to refinance, pay it down and reduce the loan.Does this seem like a reasonable plan or should I allow the 3% rate to lock me into that rental even though I want to use that equity to buy in SD rather than wait several more years, till I save up more for a down payment to buy in SD?

It should save you more than enough to pay for any renovation.

My tenant has not been paying rent for four months now and refuses to vacate.

I do plan on making other templates for tax liens, bankruptcy, divorce, and absentee owners.

When I do another LTR I plan to self manage and in a different area but for now my focus is STR. 

This creates two loan payments ($100,000 of equity and $300,000 on the new mortgage).Key NumbersHome Equity Loan Interest Rate: 6%Mortgage Interest Rate: 7%Rental Income: $3,000 per monthExpenses (management, taxes, insurance, maintenance): $800 per monthIncome and ExpensesMonthly Rental Income: $3,000Monthly Expenses: $800Monthly Mortgage Payment: $2,000ExplanationThe investor earns $3,000 in rent each month.They pay $2,000 on the investment property mortgage and $800 on other expenses.This leaves $200 profit each month or $2,400 per year.However, you have to pay $6,000 interest on the equity borrowed.This leaves you with an annual loss of $3,600.This example shows that while the rental property generates positive monthly income, the interest cost of borrowing the initial $100,000 results in an overall annual loss.

Open floor plans generally feel larger too. 

This is most likely going to be on you, but if you post any lease language that makes the tenants responsible for paying for or reporting repairs - post it and we will try to get aggressive.

@Bruce Tieuhouse hacking is a great way to get started and I think your plan is great - but I would reset your expectations on the numbers:1. the goal of a house hack isn't to live for free. 

Do you prefer your tenant shut down his business and stop paying you rent because they have no income?