I'd like to get into the multi-family space but will obviously need a larger amount of money to get a 20% down-payment for a more expensive property.

@Socorro TempleYou could get hard money, but it is going to be very very expensive.

So the home is costing me way and the returns can't even cover the expenses. 

At the end of the day your net income will be about the same without the large expense of making it a STR.

The period you can begin to deduct expenses  starts when it was "placed in service" this means when it was listed as available for rent.

The next question is permissible and non permissible closing expenses. 

It sounds like your damage was more extensive and I think it would be prudent to have a plumber identify all the breaks and then involve insurance and have them confirm it is a covered expense and how to best proceed... a freeze like this has not come through KC in some years so I know a lot of people must have had to deal with burst pipes.

Retirement is still 25 years away.My total monthly expenses (not including maintenance) are $2500.

How much will you equity increase compared to your rehab and holding expenses. 

Its a little big for me but its the type of loan I would do with private money but of course we would be more expensive and want an equity kicker.