After that, everything should be clearly laid out for you in advance and you are given a chance to weight different options.Do you intend to invest locally or out of state for now?

Also, correct me if I'm wrong, but you are almost always going to have a reduction in cash flow with BRRRR once you refinance as I understand it? 

HomesteadA property valued at $106,500 with all of it's tax reductions in place will be taxed as is the house value is $36,975.

Monthly rent will not cover the mortgage service.  1. and 2. no monthly cash flow with your numbers, the only return on your investment in this property will be appreciation(maybe) and debt reduction, 3. 

However, generally when an appraisal comes in low it's prudent to share it with the other side of the transaction to justify any price reduction (when an appraisal comes in high, by contrast, you NEVER share it with the seller or listing agent!).

I didn't have any significant reduction in problems. 

This is because even after the 75% reduction I still end up with a net rental income (after mortgage) amount which increases my income.

It needs to sell for $490k after $70k of upgrades for me to lose 35% (equal weight on the downside).

There's no exacting time limit to stay before renting out.You can refinance the property using the VA "interest rate reduction refinancing loan" that had less restrictions on owner occupancy.But, in theory, if you stayed a year and then rented it out no one really checks.

Explain the situation and you might get a reduction.