Not sure how insurance claim/policy rules in Kansas City, MO.  

Do a couple of math examples and compare your rate of return, factor in potential appreciation (its a bonus but dont let it rule your decision making process) for example house A costs 100k brings a 8% annual ROIHouse B costs 50k but brings a 11% ROIthen the answer becomes obvious, you want to deploy 100k into 2 of house B.

The Fannie/Freddie rule is 6 months before you can refinance based on the ARV.If you want to refinance sooner (for new appraised value) you would need to utilize a commercial/portfolio loan.

Also you can say the same thing about BP and everyone is talking about buying rentals.. its the herd mentality and when all these folks started buying in the deep trench after the GFC they expected the 2% rule or more that's where it was spawned.. now its 1% is acceptable and next thing you will know its .05%  etc etc.. the herd is alive and well in buying rental real estate in the US>. and I for one am happy to see it.. if the herd was not buying in many markets those markets would be flatt on their  @$$  and devolving but with all this out of state and out of country investment it saved many many cash flow markets from implosions.. since the organic market in the actual area IE local investors is not sufficient to buy all the homes that are there.. think about that one.. !!! 

Each community restrictions and how the government works internally is different.

The general rule is that the more passive the investment, the lower the return.

That'd be three people and prohibited by your occupancy rule of 2 people max, but that's not an unreasonable number of people to rent your unit and it'd likely be considered a fair housing violation. 

My general rule is that I don't want 2 major things unless it's a really good deal, but that one major thing is fine as long I can still buy with terms. 

S8 is high risk, not due to payment so much as opposed to damage/abuse to property, violation of the lease, restricted breeds of dogs, bringing in unregistered tenants etc.

., any restriction on rental income would be at the discretion of the particular banker.