I recently spoke to some banks to get pre-approved but apparently my debt to income ratio is not favorable for me.

I want to cash-out refinance and I want to lower my interest rate.I have no trouble getting loans on my investment properties, but those terms aren't as favorable obviously.

Furthermore, the tax treatment of passive income is different/favorable. 

Some quick thoughts I had while reading your post:HELOC your homes to cover the 20%Put your homes up as collateral (if you're confident you won't lose money, be careful)Open an account at your local small bank or credit union then they can offer you favorable termsYou can ask these lenders "what it would take" to lower the down payment. 

Does it have favorable commission splits?

The best part of the deal is when the appraisal comes back already with equity built in and with the statement indicating that the acquisition is in the favor of the buyer.

I would not jump to the conclusion that he is somehow favoring the tenant. 

you can potentially run into very sticky situations with disclosures were you to sell that place We’re you to call the board of contractors and tell them about the situation, he would most likely be dead meat.. they would most likely decide he absolutely did not perform in a workman like manner, and if it progressed to legal suit, the judge would see his board found him guilty of wrong doing and rule in your favor That being said....

Loan options were much more favorable for an owner occupied refinance, when compared to an investment property refinance.

I favor the month to month lease because in NY it is easier to evict someone if you need too.