Really, I think that's the final step to maximize efficiency and stability with reserves.What are others doing out there for their reserves and capital management concerns?

However, just based on the info given and if you want to maximize your returns.Suggestion: Rent it.Reasons: -You haven't lived in it for at least 2 years, so you do not qualify for the homeowner exemption (Section 121), therefore if you sell it now then you will have to pay tax on it.

Apologies in advance if my posting is becoming repetitive, I'm just trying to maximize my time and resources while being here in Tennessee. 

Maximizing rents while keeping good tenants is an art that very few PM's have mastered.

They could give you a 100k LOC and still have debt service coverage greater than 1.25 which is what many want.Feel free to reach out or drop me a line if you would like tips on how to maximize your due diligence for this project.

This is the long way of asking - is there a place to sell by the owner and offer a discount for a quick settlement, if maximizing my cash return isn't my first priority?

From your post it sounds like you need a good tenant in there more than you need to maximize every dollar.

But not maximized.

But it seems FHA limits the residency to 4 units, but I would like to maximize my first investment by  getting into a 7-10 unit building and use the NOI after debt servicing to grow my portfolio.

Points are just another way, another shinny object for the lender to maximize profits on your loan.