I am looking at a 115k property for which the PMI would be $40/month because I'm putting 5% down.On one hand, I could pay the PMI up-front for about $3,300 and increase monthly cashflow by $40, as well as save about $1,500 overall ($40 x 10 years is $4,800).On the other hand, I could pay the $40/month PMI for 10 years and have $3,300 more RIGHT NOW which I could then presumably put towards acquiring another property and expedite that process.So, what's the best way to analyze this given my goal of wanting to achieve 3k in passive income in the next 5-7 years?

The law considers 24 hours advance written notice to be reasonable in most situations.If the notice is mailed to the tenant, mailing at least six days before the intended entry is presumed to be reasonable, in most situations.

I'm not talking so much about unit size and quality/type of finishes or even the condition (as long as its financible and rentable from nearly day 1; and presuming you will be improving as needed) but about neighborhood quality, and quality of the existing tenants and prospective tenant pool.  

There seems to be many flippers/rehabbers in the current market just flipping their way into large sums of money which I presume will be used to buy cash flow properties.

Since you are occupying one side you will not have vacancy, management, and repairs/maintenance will be minimal since you are presumably not going to trash your own place or have to evict yourself.

When you say, "Down Payment," I presume you are not talking about a Lease/Option sort of transaction, which is somewhat implied by the year 1 - 3 mention. 

He is not settling the trust, the trust is being set up by the seller, and I presume with the seller's interests being protected and the buyer's rights being limited.If the buyer is unconcerned that he can lose the property quickly, without any legal statutory protections of a mortgage or deed of trust and without the lender having to foreclose; is unconcerned that should worst come to worst he will not have bankruptcy as an option to try to retain ownership of the property; is unconcerned that he won't be able to sell the property without a complete change in ownership structure and is unconcerned with limited property rights as compared to what he would have vis a vis a general warranty deed, than he may want to follow your advice and not worry about purchasing a beneficial interest in a land trust.  

Presumably, the note holder received a cash down payment when he sold the property, plus $42,961.38 for selling 60 payments.

They should give you a starting point with regard to the landlord/tenant laws, fair housing, and the documents your Board presumably offers.

Given that you have a comfort level here (I presume you have some family and friends in the area) and surely have some historical reference of your own for the trajectory of certain areas, on top of it being a great entry level market, I say dig in to RDU.