The lender is pushing you to do this to get an FHA loan.

I am just getting started out and have a rough idea of how to work through these numbers and so I wanted to throw this out there to see how far off I was.I haven't gotten any numbers on financing this so I assumed a lot.

Some people will do this with one building, then after a year go out and repeat the process with another property.

I’d like to invest in this area since I am familiar and out of state investing requires more capital.

This is how you accomplish this: You can change the opt-out language in hopes that your sellers will not respond with words that do not trigger automatic opt-outs.

Yet RentRedi would bill me anyway and I would have to request this money back. 

This step by step process is all laid out in Scott Trench's book "Set for Life".

This seems to follow the general overall trend of lower cost areas winning at the expense of those with a high costs of living.

What made you interested in investing in this type of deal?

Quote from @Tyler Reed: Hey Wendell, this is a great strategy!