Mean while i would be building equity, and if rates do lower, or when the term ends, could refi for better rates and then maybe cash flow.My questions are:Is this too naively optimistic?

The old adage is "marry the property, but date the rate" meaning that if in a few years interest rates are lower you can refinance again into that rate. 5.

Even in a lower priced investment property, like a small SFR, what does the investor without a contingency fund do when say the ac or a furnace need replacement?  

Getting the lower unit separately metered seems like a pain.

They will be able to update you on what you need to do to help fire proof your home, and if there are any other options to lower insurance like external fire sprinklers, sealing up, attic vents, defensible space, etc.

In this market, I would not finance a first time flipper at 75% profit split because the profits and success rate is lower than the last dozen years.  

It also did not have a pool like your property so that would probably lower the desirability as well.

They get a higher return since they are covering housing cost, have the $250k per spouse primary residence deduction in gains, is a savings account, higher leverage position, lower interest rate possible, will pay more premium for location, etc.House might be overpriced for REITs but not for home owners.  

Just the different brand name lowers the cost dramatically!

By investing in metropolitan areas your yield would be lower (6% to 7%) but you would have a lower vacancy rate.