In your scenario you'd have a potential tax event on that $200K difference.Here's a creative way to access most of that money tax free however. 

When you have a duplex and tenants on both sides stay for ten years, it almost guarantees that something isn't right.I would study your market and determine the value of your rental, because I bet you are losing money every month.

This has pluses and minuses.If your property is bulletproof such as no framing - cinder block construction, cement floors, gloss white paint slapped on the walls and a cheap window mount AC, then you are in a prime position to make money with S8. 

You said "don't do it for the money," but I'm sure money calculations were part of convincing you this would be a reasonable way to spend your time and money.

Most 3BR turnkey homes are closer to $285K and upwards, so with money more expensive, and minimum rent of $1800... possible break even scenario.

The amount of money you make is in a different digit.

I'm expanding my rental portfolio using my own money...rather than the VA.

I do pretty much like more SD than SA, but as you asked, the money that I have to invest it aint that much, goes between 30-40K to start and will be definitely for long term, as I said, I´m a beginner in this business in the US, as commons says I´m at the baby steps stage right now.

I strongly recommend against people buying real estate with zero money.

Lastly, if I was able to get this home at that price below market, are there loan options that require little to know money down, since it is at/below the 85% LTV?