AKA it is a way to access some of the money you've put into your home while also making sure you can still afford your mortgage payments and other debts.You will need a renter in place as rental income is apart of the calculations when underwriting these loans in addition to the other factors you mentioned like monthly housing expenses (PITIA: principle, interest, taxes, insurance, assocaited fees ARV, debt outstanding.

If you just rent the property and provide the minimal essentials you should be fine in treating as Schedule E

I ultimately realized there was very little housing inventory in the neighborhood geared towards families that wanted to rent and I essentially created a new market with $3,000 rentals which has been successful and I am now looking to replicate.

Ultimately, your ROI criteria serve as a guiding principle, helping you make informed and strategic investment decisions tailored to your financial objectives and preferences.

Essentially, it's Deal Certainty. 2.

He told me the contract wasn’t signed and that it was first come first serve essentially.

The KISS principle is helpful here. 

For example buy 300k property, renovate it (pay yourself essentially)  turn into 400k+ plus home, increase rents and cash flow.   

I just wouldn’t spend a lot of extra money providing what for me has been essentially a break even process.

Loans are typically amortized meaning the percentage of interest paid compared to principle paydown is highest at the first month.