for houston, depending on the section of town and property condition, this is a decent place to start.the value of that quad by income method would be about 395k. 

In those market conditions, DCR and LTV requirements became very strict, appraisers were extremely conservative with valuations, and the capital markets had dried up significantly, so even if you had an amazing property and managed to keep your occupancy high, it was still difficult to refinance.

Any pitfalls or conditions I need to meet to justify it being held for investment? 

The comprehensive home inspection will take place next week, but preliminary accounts say that the home is in excellent condition and will need no repairs. 

It was in good condition when I bought it, so no rehab was necessary. 

The VA lender handbook adds more than 60days may be considered reasonable if both the following conditions are met:1. theveteran certifies that he or she will personally occupy the property as his orher home at a specific date after loan closing, and2. thereis a particular future event that will make it possible for the veteran topersonally occupy the property as his or her home on a specific future date.Can anyone vouch that tenants in place on prior leases and  "a particular future event" being the date in which their lease ends would meet these criteria?

Forcing appreciation isn't that easy unless the property was purchased at below market due to a condition you're going to change.

And then I would surprise my tenant with something nice for them, thank you letter and gift certificate for dinner, something just to say thanks for working through things to assure on-time rent payments (yes, VERY good business, it's called CONDITIONING).

Well now there are a bunch of issues.First off the house in its condition (not good) now can probably get about 1.5 - 1.8 if not more.

The market rent is $1,200. the tenant (single mom) was living there for 6 years and tenant had kept the property in great condition.