If the seller offers less than 2.5%, though, the buyer would need to cover the gap.

. -- Not sure what this means Sam, I'm too much of a newb.My concern is that just because there are heavy fees, doesn't mean its not a great investment. 

Other than that, be sure each quote covers what you need for a multi-unit, like liability for tenants and coverage for rental income loss.

To cover the down payment and closing costs, I took a 401k loan, which left me more capital for the renovation work.

My thoughts on this would be - when you're taking out all money that you have invested into a property AND the property has enough equity that any loan fees can also be covered through the refinance AND the property still cash flows, you're getting an investment with no cash of your own.  

But I'm hopeful that it's one leg of the stool for me that kicks in some business, and while it's not great math, I'm glad that I have already had the cost covered by transactions from leads.

Can try to reposition to Class B, but neighborhood may impede these efforts.Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years.

I personally like long term rentals, but it sounds like the numbers don't make sense and if you cant afford to or can't justify covering that much negative cash flow then another strategy is renting by the room, that works well if you have or can convert to at least 4 or 5 bedrooms. 

You can have for example a 6 months contract, extendable, as you are not covered by long-term rental rules (neither "benefits").

Everyone covered it @Stefan St.