This home would cashflow at a higher price, so although I am aware of the 70% rule I worry that I am missing out on an opportunity to get into this town. 

Also be aware that there are a few cities that have local income taxes, Detroit being one of them.

A traditional mortgage is really the only thing I'm fully aware of.

Anywhere else in the DMV will be a war zone at that price point.Ray

Is anyone aware of this?

By the way, there are programs I think you're aware of where the bank does a 100% loan to the buyer.  

I'm not aware of any list company that takes involuntary liens into account when calculating equity.

Then while living in the home, maintain it, continue other minor renovations (paint, landscaping etc) and in a few years, after enjoying the annual appreciation you can choose to rent it out or sell.You must also be aware of the tax ramifications (lived in 2 out of the past 5 years) etc.

Are there any potential drawbacks I should be aware of for being the only multi in the neighborhood?

Their software is set up to run an HOA as far as I am aware.