There was a water leak and I think it scared others away.

I am not saying to neglect the other parts of the business, but just remember without deals you are a dead in the water.

In regards to water mitigation, you can install water efficient toilets and water efficient shower heads.

We are looking at larger 3BD/2BA for opportunities to convert extra rooms/finished basements/garages into extra beds/baths.We noticed if the rent is about 0.5% of the total property value, we will be about breakeven for pure cashflow at the following assumptions using BP's Rental Calculator (e.g., $500k property requires ~$2500 rental income to breakeven): 5% CAPEX, 5% vacancy, 5% repairs/maintenance, and 8% property management (we have something worked out with our property manager)Here are our questions:-Would ~$600/room be a competitive rate?

4 - What would you estimate for average monthly power, gas, water, and trash (I know, this is going to be a wide range depending on # of occupants, climate sensitivity factors, etc)?

These are the outlets you typically put near a water source such as in the kitchen or a bathroom in case the outlet or what is plugged into it gets wet it trips the outlet and cuts off the electrical supply so the person is not electrocuted.

At the beginning of my career we had a girl that didn't pay her water bill and her water was cut off.

If any are tied to the home (eg water), have the bill come to you and then the tenant pays you.

Furnaces break, water heaters, roofs, etc.As your question, as noted, every traditional lender will want to see stable income coming in to support the recurring mortgage/HELOC payments.  

If the property is vacant for a specified number of days (30 - 60 days) the clause will eliminate or reduce certain coverage (water damage, vandalism, etc.).