In fact, I’ve learned that they owe more than the house is actually worth.  

A friend of mine recently got a $2M umbrella policy for around $300 annually by bundling it with home and auto insurance; it’s worth exploring.Out of curiosity, are you primarily investing in residential properties or venturing into commercial spaces?

Even if you rent at a break even or slight loss, if you could have 3 years of rental income offsetting your mortgage while realizing 3-6% appreciation, could be worth it, especially if you think appreciating for this area will exceed national averages.

It seems like I need to check further away from the DMV area.My feelings are if you want “cash flow” you should buy a bond (I really like the tips rate right now) there is next to no reason to buy real estate for cash flow, if you are going to buy you should buy with appreciation in mind, which is not to say that’s the route I’d go, I’ve been liquidating properties to put in stocks and money market funds over the last few years and u just did the math and I’ve come out well ahead, but just to say there are arguments for stocks/bonds, there are arguments for levered appreciation, but the cap rates pretty much anywhere aren’t worth it vs an inflation protected bond, especially since a 3/rd of inflation is real estate anywhere, you could get “cash flow” and inflation protection much easier through a tips.

The equity is actually what you are paying for the property.In this case let's look at the numbers that count,...the current numbers.You have about $500k or more in equity, which is buying you a property that's worth about $700k (I went with the lower PV. 

We are interested in refinancing our VA loan if it is worth it.

Other than cost overruns and unforeseen issues, I think it's just a question of if this is worth it.

It’s worth considering the trade-offs between the stability of income and the increased oversight and hoops you'll have to jump through.

Quote from @Omari Atkins: Is it worth it? 

Purchase price: $69,000 Cash invested: $35,000 Sale price: $120,000 Summer 2018, I took on this off-market fixer-upper in the Polytechnic area of Fort Worth.