However, i want to address placing a tenant.My market has a low vacancy rate.  

This would allow you to maximize tax deductions at ordinary tax rates.

Always gonna be a whole bunch of cheap old houses with a whole bunch of people on Section 8 ready to rent them.

Frequent hail storms pushing insurance rates up in that market. 

My main concern is the interest rates being so high now as to whether what I'm hoping to achieve is really even possible. 

However, value add with a sale is not as implacted by rates.  

Interest Rate: 6.5% per annum (fixed)5.

In my experience, the average Section 8 resident behaves differently than the average market rate resident, and the government-backed rent is not worth the added hassle.  

The resident is great and the rent rate reflects that. 

They get a higher return since they are covering housing cost, have the $250k per spouse primary residence deduction in gains, is a savings account, higher leverage position, lower interest rate possible, will pay more premium for location, etc.House might be overpriced for REITs but not for home owners.