These comps are renting lower, no garage or second lot(highly sought after from tenants in Cleveland of all places in the densely populated city), and worse location.

The idea would be sellers are eager to get rid of the property and, therefore, more willing to take a lower price.- Search Craigslist for FSBO's?

A) Location location location - there are only ever so many places that are going to be walking distance from the chairlift, and so investors are willing to take a lower cap rate with the expectation it will be more than made up for in the end with appreciation. 

So in reality you would only be saving 3% and there would be less motivated buyers viewing their home, which typically results in lower offers and ultimately a lower sales price. 

And Zack, I was leaning towards the FHA with the lower down payment.

Could I use rental income from the multi-unit, and future rental income from my SFH to lower my DTI?

Should I try to enter a different type of market (lower cash flow, higher appreciation potential?)

I believe that the HELOC has significantly lower closing costs that a full refinance with many lenders.

Are you deliberately buying negatively cash flowing property in in order to try and lower your taxable income? 

I wouldn't want to tie up 200K long though, and I would just end up flipping, so that why I feel like all cash is better unless the down payment is lower.