I do have liquid cash reserves

Present day, I have a solid contractor, a nice cash reserve as well as hard money lined up - I just need a good deal (like most of you). 

After paying Mortgage, Taxes, PM and Cash reserve, it still cash flows.

They'll also want to see significant reserves put aside for any issues that arise.It's probably a good idea to start with a 3- or 4-unit property since you don't need a commercial loan.

Talk to a local insurance agent to get a better idea of your actual costs.Nail down your actual taxes by confirming with the town.Garbage expense might be a bit high.

would placing significant reserve cash ($50-100K?) 

@Theresa HarrisI'm just as surprised that they don't have $11k in a reserve fund.

Today they confirmed they wouldn't go below $360k, so I've told our agent to say Thank You & call us when you drop your price.180 DoM, no prior offers (until we hinted we'd make an offer). 

Existing tenants both signed leases within the past two months so nothing really to go off of, but did confirm with agent that seven people are living one of the units, and five are listed on the lease for the other unit (both three bedroom units).

the 3.5% down is reserved for owner occs.. now if you want to buy a duplex or 4 plex you could use 3.5% down as long as you move in and live there. although 15k may not be enough