Meaning, with the amount of capital that we've been able to save, about $100K, we like to use that to pay for rehab, sell the house, and get it all back plus our profit so that we can "turn the crank again" on the next property and keep growing that nest egg.

I am going through a Masshousing program as well and PMI still really eats your cashflow. 

Market TI could eat up a good portion of the lease value depending on the term.

Any advise on the best way to remove the bad egg?

I do believe BTC is already eating into gold's market.

Those expenses will eat into any potential profit.

It's like trying to find your first job and having the chicken and egg problem2. 

Additionally, say when I close on a place, do you just eat a month or so of rent until you can find tenants, or do you work that into the financing? 

Given the low cost of the repair, I'd just eat it and move on.

Those two can directly eat at your profitability.Other downsides and risks are a prolonged rehab and of course the very hustle of the rehab.