It was a great first project, I had some old friends reach out that were losing their house and I helped them get out from under the PML, bought the house and helped them repair their credit, got a contractor I knew that lived around the corner help me do a full gut rehab and put in about 1,500 hrs of my own labor into it.

Because not only do these capital loses from depreciation off set cash flow. 

Also to answer your question, I would not back out of the deal because of this or some other minor issue that can be easily fixed, it seems like you have all the financials thought and planned out, continue with it if possible and don't lose it because of that. 

I’ll need to set up a trust after renting it out I think (losing time at this point).

It wasn’t a perfect scenario, but it allowed him to walk away without losing his shirt.

It's a simple and free tool that everybody uses, and that is at least a backup in case something happens - you lose your hard files, there's a fire, or some file nerd breaks in and steals your documents. 

And on top of that, I’d be paying rent or a mortgage somewhere else.I understand real estate is a long-term investment and that appreciation and equity plays a role, but losing money month after month, even post-move-out, is hard to justify.

In Florida they tenant loses their deposit and has to pay double rents.

Once you’ve got some experience and equity built up, you can more confidently move into multifamily properties when the right one comes along.That said, if your goal is to scale into multifamily, don't lose sight of that.

So when you utilize a cash out refinance I am assuming you will lose the initial terms of your current mortgage?