I don't hold them in my portfolio but I do wholesale them to other investors since the discounts are deeper.  

Assume my marginal income tax bracket is very high, and mortgage rate is 5.25%.

Section 8, student rental, market rate?

Rates can be very similar to those of conventional financing (Fannie/Freddie - full doc loans that you will need to prove income to get), but typically a little higher than conventional financing. 2nd - Networking and partnerships! 

Once that extra rental started generating income, he realized the higher interest rate was just a temporary hiccup on the way to bigger returns.In your case, maybe look at a structure that keeps your best cash-flow property on a lighter refi (say 50% or 60% LTV) while you go a bit heavier on the one that’s not producing as much right now.

It got got a good rating (4.6), not that it is always a good indicator.

While not impossible, you'll be paying a much higher interest rate for the loan than with 20%+ down and also you're likely paying some points or splitting the profit if for resale. 

Quote from @Glen Wiley: I am not a big fan of those rules - I think they are too simplistic.What will your interest rate be?

Mid-term is more likely to work in any market than STR, but I think you would be surprised at how well an STR could do if there are no other options like that in the area (think people's parents or friends coming in for the week(end)).I've seen a lot of people grimacing at the net-negative house hack (it's just a product of rates and low inventory in a lot of markets) and this is one option to try to recoup some of that loss.

I wouldn't discount that credit report.