My strategy for the foreseeable future is 'buy and hold' with long-term tenants. 

Have you considered other starting strategies like house hacking or live-in flips?

I love that these homes are in class A neighborhoods, I have seen this strategy work out for investors before but they were at least cashflow neutral. 

Then let's set up a call to discuss your options and figure out a strategy for Home 2.Jeff

* What is the best strategy for first-time investors: Own or Arbitrage?

It's a range and depends on the property type, location, end condition and rental strategy. 

What is your exit strategy?

Leveraging seller financing creatively, with strategies like stepdown interest rates or unique amortization schedules, could be the key to bridging the gap until the property reaches its full income potential.

My strategy would then be to lease at least two of the renovated units, increasing occupancy to 90%, which could improve the chances of securing favorable terms for refinancing.I haven't pitched it to the seller yet.

It doesn't make sense to you because you still don't understand the strategy.