I think your plan has merit. 

So - somewhere 2 hours away, or somewhere you like to vacation in, or where all your family lives, or where you plan to move someday.Too many people are trying to do exactly what you're doing - pick a market based on a formula - and they end up buying a random 'cheap' property thousands of miles away, turn it over to people they've never met or even spoken to, and then... lose money.  

Is this pocket a value oriented area (most sq ft per dollar of rent) or will they care more about proximity to highways, retail, walkability?  

Definitely tread carefully here to avoid any discrimination claims!

It’s also unclear if they plan to order another appraisal.

I have employer sponsored plans that match contributions as well as a solo 401k and I do a backdoor Roth. 

The cash on cash return is only meaningful when you evaluate it based on your long term plans.

I plan to sale the lots that way.

So I’m trying to come up with a game plan  Conventional loans do require 25% down on an investment property.

It depends how long you plan on living.