The tax on UDFI  may eat some of that differential, but likely not all 3 points. 

I had never considered that the early withdrawal penalty didn't always eat into the interest significantly.

A property manager fees could eat you alive with the turnover you could experience in a 4 plex.  

I want to take the method of having higher quality tenants, as lower quality tenants seems to come with hidden costs that quickly eat away your cash flow.

Maybe not this year or next, but when you have tight cashflow, and you have to spend $5k on something (which isn't a large amount), it can eat your profits for several years. 

I believe I could get a higher paying tenant eventually on the existing side to meet the 1% rule, but is it worth it to eat the difference in the meantime if I can secure a newish (2000+) duplex with solid foundation, roofing, and decent interiors?

maybe one of the dogs will eat the chickens!

I work in pest control and block houses are just as likely to get termites but wood frame houses just have a lot more wood to eat. 

The fees would eat up too much of the actual amount of money available.

What's a polite way to say Eat my shorts?