This might make sense, but it depends on your strategy and what you're looking to do.If you don't have 30%+ in equity...If you're planning to hold them forever, keep the 30 year financing. 

Since we have built in equity since we bought right (well, usually at least), we can get the whole private loan financed out.

If the teardown value is $835k, you already have 60k in equity initially , you rent it out for the first year, still losing that $700/month ($5,600) but you will retain that in principal pay down from your tenants.  

In Texas they don't.If you go out and get a 5% down loan on say 200K, you'd have what 30 or 40K in equity a few years out? 

I have most of it in equity in other properties and some cash.

I have about $30,000 in equity, and I am paying close to $200 a month in PMI. 

But there are times where this can work such as if you just got you 116k back and then refi the house again later on to get whatever else you might have in equity.

This means that we have $18,683.76(100,000 - 81,316.24) in equity from the loan.

Now your first property's cash flow is cut in half, but you add total cash flow.Interest money going "down the drain" is only beaten by seeing your wealth tied up in equity while you are still in the growth phase.

As it stands now we have an estimated $110k in equity based on the same floor plan that just sold 2 months ago down the street.