So 15 years down the road when your property is worth $100k more you aren't going to be worried about the $20k extra that you paid upon purchase.

I'd also like extra cash as reserves to purchase an investment property in the near future.Question: Since I already have a great rate on my loan now, would it make more sense to apply for a HELOC and access the money as needed?

In a competitive market, finding a good deal might require some extra time, and creativity.

How does it work if the neighbor reimburses me 100% out of pocket and then I submit a claim and get extra reimbursement on top of that? 

They will become an intricate part of your team and over time you will learn a ton of lessons from them regarding the intricate and often confusing world of insurance.

P/S - The home has a full unfinished walkout basement I plan on turning into a one bedroom apartment in the future for extra income.

@Charles CarilloI hear what your saying.The the property I’m looking at will have a payment of 1500 for piti and interest only is 1175 that’s an extra 3900 for the year.Am I thinking the wrong way because the banker don’t agree with me either?

It may sound nice to pay a 6% management fee but the extra fees can add up to be more than the other company that charges 10% with no additional fees.

Or they don't want to go through the extra process that FHA loans require.

Those are extra.