However, I have to make absolutely sure that the rent income will cover all of the monthly expenses including principal and interest.  

Just cover the Principal due, but because the full loan amount could be $420K, you can draw on it if needed.

After the initial establishment of owner occupancy, nothing prevents you from moving out of the home and renting it, unless you want another FHA loan.The second link states: Principal Residency RequirementWhen you take out an FHA loan, it's based on the understanding that the home will be your primary residence.

Your principal and interest are not considered operating expenses for this calculation.Traditionally cap rate is used for commercial properties and not for SFH or 1-4 unit properties.

You don't know how to solve the entire problem for a seller/principal, however if you connect with people who do, you can get compensated for introducing the parties who can compete the deal. 

My question is this should i keep investing it and make 7% APY or should i pay the $25k to principal  on one of my mortgages and also pay the 2-4k a month to the principal on my mortgate were is the better return on my money. 

@George Frye30% of unpaid principal balance.

Here's an example of a property we bought two years ago in 92105, with numbers rounded for simplicity and using your 3.5% interest rate example (an investment property rate you won't get today w/o big points, BTW):Duplex purchase price $400k - 60/40 building/land split.Depreciable basis = $240k ~= $8700 depreciated per yearRent = $2800/m = $33600/yMortgage = $300k ~= $10300/y interest (year 1)Maintenance = 8% gross rents ~= $2600/yProperty Taxes = 1.1% = $4400/yInsurance = $700/yUtilities ~= $2400/y ($100/unit/m water+sewer)Vacancy and Loss = 5% = $1700/yMisc Stuff = $500/y (mileage, other soft and hard expenses to be claimed)Total Income: $33,600         /         Total Expenses: $31,300Y1 Retained Earnings (P&L Profit): $11,000Y1 Tax Reported Profit: $2,300Y1 Mortgage Principal: $5,800Y1 Balance Sheet Delta: $8,100  (8.1% Y1 ROC)A couple notes:Capex is not included here because depreciation has been taken on the balance sheet (in theory, they are equal values - in reality, that capex cost will very likely be less than the depreciation in a market like ours).This is year 1.  

I used ProSchools for my Broker and Online Ed for my Principal Broker courses; very happy with both.

Has anyone every heard of Elite Legacy Education real estate ...they teach the Rich Dad Poor Dad  principals. www.EliteLegacyEducation.com?