But, could I minimize risk of renter defaulting on payments for the 2nd property by turning this property into a section 8 housing unit with guaranteed income from the gov't?

You can request those tenants to clean the bathrooms through rotations or just charge them a small cleaning fee to hire cleaning crews to clean the house 1-2x a month or you do the cleaning yourself to save up money and have extra passive income.

How is the effective gross income calculated?

More on DSCR loans: DSCR loans won't use your income to underwrite the loan.

Of course, if $10k is what you are after, you could take $10k & reinvest $10k and grow your future stream of income. 

I want to build a rental income portfolio in milwaukee.

Here’s why:- unless you strategically reported your taxes as making 100% income and not reporting an entire loss on your schedule e - you will most likely not find a lender who will qualify you for a HELOC.

How much do you deposit into one bank account past 18 months = income - 15%

Heloc I think we could get $175k, maybe DSCR, I am a veteran with service connection disability rating 40% but with my mortgage and car loan not sure I could make debt to income work.  

Total leased income on the property will be $2000 or more per month, plus another small additional income the property offers ($100 to $200 per month).