You shouldn't use the tenant to paint, even if he matched your normal painter's bid.

Is this something a lot of people run into, is this something that is normal?

The purpose of the FHA loan is to increase home ownership for those who would not normally qualify for a conventional loan.

When we compare costs to cover and what we have actually received in claims (we rarely claim, normally pay out of pocket to keep premiums lower), it seems we may be in better shape to self-insure. 

I did get some work done there and it wasnt as relaxing as a normal vacation but there will be a time for that down the road :)

I checked my area and thats about the typical cap rate. 6-8% is fairly normal...My other problem is on top of those other expenses, I will also have about a $2750/month loan payment per building. 

Oftentimes there are still responsibilities you will have as the owner in the PM contract, so make sure those responsibilities are well understood and are things that you can handle wherever you will be relocated to.My biggest lesson learned from PM groups is that a big group with a lot of clients is normally pretty complacent, but has great connections. 

If NOT occupied, I'd go the route of a normal, good performing agent who you can be confident will get the deal done, get you the best price, etc. 

You could setup a simple waterfall structure where the normal split is 70/30 and anything over a 10% CoC is split 50/50.

Offer what's normal for closing costs.