The current owner is letting me take over the property as a tenant as long as I pay the water bill and the mortgage payment on it and whenever I decide I can purchase property for the balance of the mortgage  they are in no hurry for me to purchase the home as long as the mortgage is paid. 

I am scared of servicing two mortgages in the case of a vacancy.

Like Jake Baker suggested, keep good records and have a dedicated bank account for your property, properly separating personal and business expenses.

This property is gonna cash flow over $1000 a month after we're all said and done with utilities mortgage and more.

Dealing with S8 tenants successfully requires proper screening.One of the best screening tools is to inspect their current home - how it looks is how yours will look within 90 days or less.

pays your mortgage while you make Cash-Flow on those properties that you have under your name that pays you a higher ROI every Year.

It is increasingly more difficult to pay of even one mortgage when you are cashflow negative, let alone multiple.

Find a mortgage broker who will help you with thisGino

Doing a 75% 1st mortgage and 15% heloc or heloan would likely give you better cost of funds all around.If this is an investment property, you can do 80% cash out refi using NonQM loans such as DSCR loans, but at a higher cost/rate than if you stick with 75% loan to value. 

Also, you will likely only be able to use the rent to offset the mortgage pmt debt on the rental property to $0 since you dont have any Sched E history yet.