This is the best way to start hands down.However, there is the initial VA mortgage insurance fee.

Nate @Nate Marroquin   You can use the income from your tax returns on the current rental adding back your paper loss (depreciation) and add back the mortgage interest, property taxes, home owners insurance deductions on your tax returns. 

Be sure to hold a hefty reserve to handle on-going maintenance, capex, taxes, and insurance.

., home office, health insurance).

In my opinion disclosure is always the best policy in both scenarios. 

Though I'm in sure what the trends have been in TN over the last couple years.

@Mohit Gupta  depending on number of occupants your regular insurance can cover it, read the policy, ours covers two roomers. 

It depends on what the property appraises for in 24 months,  if you will be able to get home owner's insurance, if lenders are lending and so on.

The property was rented and generated $160 cash flow after mortgage, taxes, insurance and property management fees were paid.

Beyond the bedrock issue, soil conditions can be costly if the property has problematic soils such as too much silt, deep topsoil, or extensive wetlands.You'll also want to know what ordinances are going to affect your budget - things like tap fees, tree ordinances, storm water retention policies, etc.Bottom line is that you have to investigate ordinances, off-site conditions, and on-site conditions before you can even begin to budget your development.