Also - when calculating your cash flow, be sure to account for property management costs, vacancy, maintenance, and especially cap-ex. 

Tax (listing claims ~$5900 annual, ~3%)$20 - Landscaping/Snow$284 - Vacancy (8%)$284 - Repairs (8%)$355 - CapEx (10%)$426 - Prop.

Wouldn't that save me $150x12 = $1800/yr and therefore I could look at my return on that investment as 36% annual return ($1800year/$5000), and therefore this would be a wiser option then focusing on a second property until I remove my PMI?

Taxes have been properly filed each year to account for the rental income, however the first house listed has not been shown on taxes yet because we do not file this year's until next April.  

From my experience ARMs typically adjust annually or semiannually so you get a fixed rate (often lower than 15 or 30 fixed) for that period of time.

Account Closed.

I provide a bank savings account at a bank nearby the properties for them to deposit their checks/cash/whatever.  

Account Closed, how are you looking for these prooperties?

Is an annual term too long?

You'll need a lawyer and accountant to decide the best way to handle ownership since there are rules surrounding syndication (though it doesn't sound like that's really what you're are doing.