No reason to wait and eat 3 months of rent.

I don't eat out a lot or go on fancy vacations (I do travel), I don't buy a new car every 4-5 years (I do keep it up, but my first car was ~20 years old when I traded it in this spring). 

You would have to self-manage though, as paying a property manager will eat up most of your profits.

Business should start to extend only because there is nothing left to eat in the market not because you are losing in the competition. 

Personally I would chalk this up to making a mistake not raising it more the first time...eat the mistake and maybe raise it again in 6-12 months.

You probably won't like it but, hey, you can't always have your cake and eat it too.

HML eats up so much profit; that's the only thing I don't like

By the time you take out a trad. cash-out refi, you'll be eating a bunch of fees, which will chew into your theoretical 5% arbitrage spread. 

You will need to factor in rehab costs, which could easily eat up another $50-75k depending on the condition.

We also have pretty high property tax bills (around 2% of the purchase price/property value) that eat into a lot of the rental income.