Are there any strategies, tips, or potential pitfalls I should be aware of as I explore this market?

Happy to discuss this further on what might make the most sense for your end goal.If you are renting right now and starting your path in real estate investing, as said above, I really do like the house hacking strategy for your situation.

Things like this are why it's important to work with a professional who is well versed in real estate taxation because the "common/simple" strategies taught frequently like BRRR or house hacking actually get fairly complicated when it comes to handling it correctly. 

My recommendation is for your first MTR to get something that would be a decent LTR, this way you have a fallback strategy.

House hacking is an excellent strategy, especially with the potential to use an FHA loan to secure a property with a low down payment. 

Which essentially puts some standards in place and a good guideline for handling all things in the company. ie. company mission, telephone standards, tenant screening process, etc. 

Lastly, while your exit strategy looks good, keep in mind that refinancing costs or delays may impact your timeline, so have contingency plans in place.

Your strategy on a 5/2 is going to take a little more blocking and tackling for mid term rentals.

Additionally, the rental arbitrage strategy is not investing, its operating a business.... an extremely risky business.

If I were in your shoes, I’d look at the BRRRR strategy (Buy, Rehab, Rent, Refinance, Repeat) to stretch your liquidity while building equity and cash flow.