Im self employed, roughly make $130k gross anually, 1099 NEC , no debt at all, 740 credit score.  Want to get a loan for $250k in AZ

There are quite a number of things that can make utilizing an FHA loan more difficult such as more barriers during appraisal, appearance of low qualification/little cash, typically longer closing period, likely higher interest rate, and PMI cannot be dropped without a refinance if 3.5% down.That said, just chain 5% down conventional loans, and make sure your duplexes pay for themselves.  

For a cash out refi, you are generally limited to 75% LTV and rates right now are in the mid 7s for good credit and a DSCR over 1.0. 

Make sure the previous property management company did their job and communicated a change in management prior to you taking over--along with your contact information.If they have no done this, they should so the tenant doesn't feel like a scam may be going on.Just make sure they're away of where rent payments need to go and who they can contact in the future. 

We use Smarter Contact, been using it for 2 years now.

The higher the cap rate, the more risk involved in the building. 

The only other option that comes to mind is to make the improvements and try to achieve favorable rental rates to push the story that 2 BR homes rent for a premium because its unique.

When you sell a property that has been depreciated, the IRS requires you to "recapture" the depreciation deductions, taxing that portion of the gain at ordinary income tax rates.

There are many STRs that do quite well in the suburbs of major cityies Off the top of my head, I can think of one of the STRs we manage that is 40 mins outside of Dallas and it has a great occupancy rate.

The interest rate on a HELOC or Heloan may be better than the personal loan.