I refinance my current loan, an FHA, into conventional (my FHA is at a 3.35 APR...hard to beat) at a higher rate, PMI will come off, and then the loan payment may be the same or slightly lower by $50-$100, and then immediately use FHA again to buy the new property, which is a four unit property. 

We were even offering a bonus to buyers agents, we often do on lower priced stuff.

I put in $800 (a new fridge and stove for lower unit) after closing.

And it’s not a grant, it’s state specific  first time home buyers mortgage program that is offered with lower pmi and interest than others in the area and it did require owner occupancy.I only ask because the area where I bought isn’t the best but isn’t the worst if that makes sense.

The lower unit needs work (about $12-15k) but can be converted to a 3-bedroom unit.

Getting into higher end for putting in lower grade product.

By the same token, I don't believe your repairs and maintenance expenses would decrease because you are charging a lower amount of rent per month. 

If the feedback you get from potential buyers is too high, then you'll need to go for a pricing reduction or reduce your potential margin to meet their need for lower pricing.

For $12,500 you will pay a lot higher fees and costs due to the lower amount.

Interesting to hear that offering a lower return may have got him more traffic