If this stretches to 9–12 months, holding costs could climb fast.I like your point about tightening the rehab costs, I think there’s room to bring it closer to $100K with the right contractor and materials.

Even if the rental has a decent cash flow with additional flood insurance, we're still not sure we want to take on that risk as we are out-of-state investors (planning to move back to KY in the future, but not now) and we don't like that it will potentially bring down the perceived value when we try to sell it in the future.The seller has never lived there and has not provided any information on if it has flooded before or not. 

You could leverage your experience while they can bring the capital. 

I have seen all sides of this equation, self managing my own properties locally, but moved with the Navy 1000 miles away and managed the same rentals from afar, and had friends here in Memphis that had 18 properties and had them all with PMs with varying levels of success, some bad and some great.Self-managing brings about an additional level of responsibility that most of the time is fine, but that is not what you hire a PM for.

Usually prospective tenants that agents bring to showings will be more qualified to rent in my experience.

I did have experience operating LTR's to bring to the table, but even if you don't, it's not that much more complex.

@James Soto I think it's a great idea, I love the BRRRR method if the numbers don't work as a BRRRR you could still flip it to bring in some capital! 

VA loans are assumable but the key is you will have to bring in cash the difference between the asking price and the current loan. 

This home has been highly operational with high rates of occupancy, bringing in anywhere from $500-$1500 a month in overage beyond our monthly expenses.

Do I need to bring my own funds in any way?