Additionally, you might want to consider an FHA loan for the duplex if you plan to live in one unit, as it requires a lower down payment and could still allow for a good return on investment.

There's so much content and so many individuals who push inexperienced investors to take action before they are financially ready while downplaying the risks, particularly those associated with  properties in lower tier neighborhoods.

You'll need to build a new foundation above the base flood elevation and lower the home onto it. 

You don't get better roi -- build a nice monthly income with a couple props in this realm and then move on to a "better" area to play the lower returns hopeful appreciation game - or consider single family, flipping etc.  

Any advice on how to get rental income reported (from the current rental property and future income from renting out our primary residence) and lower the DTI??

Commercial bank or local business bank - where they will fund as much of the purchase price and rehab budget as possible, typically will have a lower interest rate than option 13.

In current market conditions, rents have generally increased, making house hacking a viable entry strategy.

Vegas is a perfect example U can buy a 400k rental there and in many  cases the taxs will be lower than say a 100k rental in Jackson MS.

Our local market in Columbus has been pretty incredible with price points lower than markets like Austin or Nashville, with a better economic outlook than similar large cities of over 900k people. 

Since yours is only water and heat I would recommend you charge 50% and lower the rent cost rather than factoring it into the rent price.