If that's about $5K, you're much better off renting below market and keeping your units filled forever by stretching out your lease for 2-3 years each with no rent increases.Analyze the numbers and you'll confirm that this is correct.

In most cases that will just stretch things out and make them worse.

This seems ludicrous to me as I sometime have to really stretch myself to the brink to bring my properties up to spec so that they will be approved by HUD.  

Why they make a process that could be finished in a week stretch out to 4 months I have no idea, if you can do it faster it should be allowed.Anyways, I've had an agreement with a local broker to hang my license there for a couple months.  

If its a stretch to come up with a DP for this, run the numbers and see if its worth selling condo #2 to move up to a duplex.

That's stretching my limits of belief.

I am going the buy and hold route, focusing on small multi-families, but I am not ruling out SFR by any stretch if the numbers are right.   

It'll discourage from calling whenever you have a question - and will lead to poor tax decisions... all because it sucks to get small bills for just having a phone call.Hire one that you pay the same each month- it'll keep you on the same team and allow you to extract the maximum amount of value from them.Conclusion: Either would work for you right now (option 2 may be a slight stretch)... but if you plan to continue expanding, consider option 2 eventually.

I know this is going to vary state by state, but 60 days seems like a stretch to have any chance if the previous tenant were to dispute this in any way. 

I'd like something that is easy to set up/operate as well, I'm not an IT guy by any stretch.