If I were OP I would sell only if I had a 1031 exchange investment that I thought could do better.  

Very exciting news that the MLS put out this morning here in Los Angeles in regards to the hottest local markets currently for Condos/Co-Ops as of Q1 2017.

(that's the loan you describe in your OP as the first mortgage 41/2%, 20 years, 5 year arm)  This bank will  do  an equity line of credit against properties I already own.  

Due to travel/ops tempo, I don't have time to manage a flip here on island which is why we decided the buy and hold strategy. - The reason we are focusing on the front range of CO is because we have a property there already, our family is there and we know people on the ground there to help us look at things when we need someone to go on an inspection or drive by at the very least.  

I took the mention by the OP of HML and the aversion to interest rates as "proof" that a HML was feasible.

It puts the electrical and water (if there is sub-metering) costs in the hands of the tenants.If you cannot find a way to put {a stackable} laundry in each unit, then I would put a single set of coin-op in the basement and use the revenue to help offset the electrical and water costs.

Those are the guys that the OP is talking about.

Or a condo or co-op rental you used on occasion?

If you're house-hacking and want to use the FHA loan for another property later on, you will have to refinance the first property (most likely into a conventional loan).To address the OP's original question, the benefits with going with a 20% conventional loan versus a 3.5% FHA loan would be (1) not having to pay PMI (2) having an advantage when making offers on deals since sellers typically prefer conventional loan offers as opposes to FHA.  

Are you adding a washer / dryer down there as well I'd go coin op if you don't have units upstairs already.