Yes, the financing can be a bit more expensive in general given the upfront MIP and monthly MI (MIP is Mortgage Insurance Premium and MI is Mortgage Insurance), but the rent they bring in can be used by your lender to help you qualify.Here's a good example. 

I would love the opinion of others...should I hang onto it and have the mortgage paid down by tenants or should I sell it for a premium now and invest in multifamily?

I have $40k on the mortgage, but it's tax assessed at $90k but if fixed up premium shape be worth $125k.

I think I'd prefer that to buying turnkey and paying the premium.

Also, I don't know if the Rent premium (the extra 20-30% rent) would count against his debt to income ratio.

A lot of the homes in certain areas (Lawrence Twp, Little Flower, Irvington, Bean Creek, Christian Park, etc.) are being listed for a premium (i.e. $60k, $70k) with plenty of work left to be done to them when resale history shows the most you'd get is maybe $80k or $85k. 

That's why a lot of times you'll see HO6, or "walls in" coverage covered under a separate insurance policy and premium. 

@Christopher FreemanSince cap rate represents a risk premium it fluctuates by market, property type and class, demand, etc.

(MLS#:A10499901 )It seems that now prospective renters are not willing to pay any premium for ocean properties.

You will certainly have costs that include title insurance premium, adjustments for property taxes and homeowner's insurance.