I'm not sure how much flood insurance costs on a duplex or triplex in Galveston, which would be a huge limiting factor potentially.

It's good to note that mortgage insurance is no longer a write off and was never as such for people who made more than 110k AGI anyway (it phased out from 100k to 110k AGI).When considering FHA you should consider that huge upfront MI and the monthly paid annual MI factor of .80-.85% as well.

@Matt Holmer Financing is always a factor in cash flow and needs to be modeled into your long term plan.  

TICs grant the title needed to market the property as a bonafide owner.Real estate agent on much less exposed to claims of net listings or agency relationships being in title with a TIC.Without being on title, it is hard to get permits and hire a contractor.

If you can achieve a 5% return within driving distance with a 2 risk factor (risk based on a scale of 1-10) but outside the driving distance you can achieve a 20% return with a 3 risk factor it's wise to at least consider the property further away.  

You need to factor in property management at 10% of the monthly rent, and then another 10% for monthly repairs, along with your 10% capex. $100 for capex/repairs won't be enough in the long run when it needs a new kitchen, roof, flooring, and bathroom in 20 years.

Also, remember that lower than median rents for the area are prone to bring more headaches, and increase the hassle factor of being a landlord.Always do your due diligence and don't forget to include CapEx on these old homes! 

We realize that either you need to get the property under contract for way less that market value which is not in our client's best interest, or you have to find that buyer that is willing to pay more than any other buyer that it has been exposed to thru the MLS, to cover your market price offer plus your fee.......not likely to happen.

I'd have to pay 5-6k to get the cash back out or add that cost into the new loan if it's a "no closing cost" refi.Does this strategy factor in the closing cost for Cash Out?

Price point of the home isn't always a factor supporting more expensive windows.