So I am spending more time fishing.

If you are spending $50 K on heating oil you need to talk to the oil companies .  

Is the increased income going to be worth the extra time and gas money you spend on a longer commute?

On top of it your realtor is not receiving a penny for spending 3 months pushing your offer.

With this strategy, I spend about 5-10 hours per week "managing" this portfolio and it handily pays our families bills. 

It would likely be best to spend a couple of weeks there, if possible, setting up some meetings with property managers, realtors, and contractors.And I strongly suggest you get a property manager at first.

Be carful spending money to fix the repairs up since you will not likely get any more that what his deposit totals.

Would it be better to bite the bullet and spend the $35k (will be using conventional loan)  up front as a down payment and have a home that could potentially be a rental when I move out in 3-4years or rent and pay someone else that $35k in rent over the course of the next few years.

In my research I found that hotels spend an average of 8% on marketing/sales. 

Best case she realizes you're serious and won't spend her rent money on another vacation