Another tactic is to eliminate the deferred balance over a four-year period at 25% per year but only if the borrower maintains and on-time payment schedule.

We were looking at 2 potential properties and last week we eliminated 1 of them and put in an offer on the other. 

The only answer here is you have lost 6 months  where you could have used your RE licence to build capital.No capital - The only answer is you need capital  (ie income, ie a job)  eliminate your debt,  build capital.Get out and earn and learn

To eliminate PMI.What is your exit plan?

It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.Make sure your property manager is a licensed real estate brokerage.Understand you can not eliminate all risk, only mitigate it.

It would eliminate the worry of finding a licensed MLO for Dodd-Frank, and I would get a lump-sum.Anyone done anything like this?

This will cut out hours of questions/meetings with the contractor, and eliminate any delays because he doesn't have the info he needs to order and move forward.

Also, would purchasing an out of state rental property eliminate my option to be approved for an FHA loan on a primary residence in LA later on?

The good news is there are legal structures that can be put in place to eliminate the possibility of losing big in that case, even if insurance won't do the trick.

Conveniently, both solutions are the same, eliminate that person from your sphere asap.