Just make sure whatever decision you make, that you do not do anything that unnecessarily sends red flags up to the IRS! 

What red flags could you see?

The only caution I would say is not on the insurance side but on the sales side, if I walked up to a property and saw a bunch of patches on a roof it would be a red flag to me.  

Recently installed it (Red Rock Hickory) in one of my units. 

Alarm system runs off cell towers; no need for a landline. 

I completely understand your concerns with the debt to income ratio, however, I have seen several podcasts (on BP) to were people have done the exact same thing.

I like to think of it as a revolving credit facility where I am the bank and I don't have to rely on an external credit committee and the associated red tape to draw from the facility

Those are red flags, a number, not so much. 

I wanted to know if there is a lot of red tape involved in remodeling since it is a historical neighborhood.Thanks,

Especially the days when you discover that big capex like a roof being blow off (happened 2 years ago), some tweakers climbed up on the roof and gutted the A/C (did two of those in the last 12 months), an evap cooler leaked for so long that the drywall on the ceiling of the kids bedroom caved in (last year), the hot water heater blew a hose and a major leak went unnoticed for 10 hours flooding the hall, kitchen and living room (dealing with that now), the tenant smelled gas outside, the gas company came and shut off the gas because the underground pipe is corroded AND also discovered that the water heater is not venting properly so it got red tagged (just dealt with that last month) or the time the tenant "invited" a homeless guy over, he moved in, then called his other homeless buddy up and he parked his crappy RV with his entire family living in it in the driveway.