Do the rules still apply if I cash it out?

Is there a hard and fast rule based on a percentage?

I learned something from your comments that I hadn't seriously considered before:  The multi-year lease I think is GREAT for turnkeys AND for a newer investor who has a full-time job and a family to support may not have the time, energy, resources, or knowldedge to start from the ground up on with out-of-state real estate investment, I can totally see how turn-key can be super convenient and VERY attractive. 

But all the Alabama Supreme Court rulings that I have read has ruled in favor of the previous land owner being able to redeem the property, unless you have a tax deed and have had adverse  for 3 years after obtaining the tax deed.

save up for the downpayment, meet, learn from and court lenders, analyze the continual stream of properties coming on and off the market, start building your support network which you'll rely on when hosting, and you'll know when the time is right.

The rules don't change much in terms of what is tax deductible just because it sits in an LLC.You are correct in that putting it in an LLC prevents you from getting government agency (i.e. fannie) backed debt, which is allowed on up to 4 unit buildings. 

There are a lot of advantages to commercial like there's no rules on seasoning so you can sometimes turn the refinance around much quicker.

From what I've heard they have stopped issuing new licenses and have been enforcing the rules against people operating without a license.

Live in it for a year to meet the primary residence rule, make the cosmetic repairs to force equity, then look into refinancing out of your VA loan into a conventional loan, so you can use your VA loan again. 

In Texas Josh there are a lot of weird cash out rules.