Any kind of non QM financing will have higher closing costs compared to conventional.

Currently under contract for $552,000 with a conventional loan.

This is a conventional loan where they also cover your PMI (private mortgage insurance).

I am considering putting an offer on a 2 acre empty lot, in a sloped wooden area in Western North Carolina.

LTRs with long term conventional financing and standard management aren't really cash flowing anywhere right now. sure, there are lower cost markets that look better on paper, but there are costs associated with those supposedly cheap markets as well - deferred maintenance, more challenging tenant base, higher cost turnovers as a percentage of the rent.2. i wouldn't pick a random market thousands of miles away based solely on statistics or numbers. 

Conventional will be reported.

I would focus on improving your credit and obtaining a more stable income so that conventional financing is an option. 

Keep in mind that this was for a DSCR loan, not conventional financing.  

I can make the down payments in the smaller market on cash-flowing deals, but these bigger markets require 40-70k to make a deal the conventional way, and I just don't have that to invest.

If not, I'm guessing it would be treated as a traditional rental loan, either conventional or DSCR, using market rents rather than the rent in the lease agreement.