In your case though, you're fortunate because Kansas City is a strong investment markets if cash flow is your primary objective.

Tenants will pay their own utilities.My objective is to repair and update whatever is necessary now so that I (ideally and hopefully) only need to concern myself with cosmetic fixes and insurable high-dollar freak accidents as much as possible over the next 20-40 years while holding these properties.With that said, do you think it makes sense to go ahead and replace the 1999 furnace now prior to refinancing so that (1) I can capitalize on the contractor's discount, (2) I don't run into having a costly replacement sooner than later with tenants in place, and/or (3) it might help up my refinance numbers?

If the foreclosing lender is a private investor, there's a chance of doing a lease option based on what their objectives are.

My overall objective is to have my own space (I have a toddler), while also getting into real estate investing. 

South Lake Tahoe recently passed a ballot measure essentially banning most short term rentals.https://www.rgj.com/story/money/business/2018/12/06/most-airbnb-vacation-home-rentals-banned-south-lake-tahoe/2233124002/ And Laguna Beach just did the same thing:https://www.latimes.com/socal/daily-pilot/news/tn-dpt-me-lb-council-20190505-story.html“We don’t want commercial ‘touristification’ in our residential neighborhood,” said resident Charlotte Masarik.Ok, well that’s not Arizona… but rumblings of similar complaints are happening in Flagstaff as well:https://azdailysun.com/news/local/airbnb-a-boon-for-owners-headache-for-neighbors/article_1abd0fbb-83ee-54d6-96c3-cd753349094f.htmlAnd Phoenix too:https://www.azcentral.com/story/news/local/phoenix/2018/11/30/airbnb-rental-home-closes-shop-after-neighbors-ban-vacation-rentals/2025777002/So let's take a look at what laws regulating short term rentals are already in place.Current Arizona LegislationIn 2017, a law was passed declaring that cities, towns and counties cannot place any restrictions on short-term rental properties just because the property is not classified as a hotel. https://azdailysun.com/news/local/despite-local-objections-new-year-s-laws-include-airbnb-expansion/article_52d485d5-79cd-567f-943c-bff142e9493c.htmlThis law specifically targeted any municipalities that were trying to restrict Airbnb and other online lodging marketplaces from operating in the area.

Thus the checklist is invaluable to provide an OBJECTIVE system to analyze applicants.

Then when the Fed started raising rates earlier this year Wall Street had other shiny objects to chase and all but shut its HML support down again.

I wasn't even aware of few things that were mentioned in this thread.Based on the responses, I have narrowed it down to following possible options, based on my objectives and preferencesOPTION 1: Invest in a MF in outlying areas of bay area such as Central valley, Gilroy/Morgan Hill or Sacramento. 

The reason being that the end buyer with an assignment would see your profit (the assignment fee) and might object to paying a large amount, so I avoid the risk by doing a double closing instead.

That's a great start, it's important to have a focused objective especially when you're just getting into this business.