Also, the MLO method allows you to work in the bigger deal space, it gives you the opportunity to control and profit off an amount of units you could never purchase with 20,000.

Profitable, but a timid comparison to the impact compounding would have had on the original money you did pay for that little house.

Shows a monthly profit of about 2000.00 with an ROI in year 1 at 33%.

And will continue to flip for profit as actual income.Worst part w this first deal is waiting for it to close so my money is not tied up!

As @Seth Wilcock said you are likely better off pursuing something with a HomeReady or HomePossible loan if you're going for a single unit. 1.

Bought a house for ~$850k last year, moved out, are now selling that house for a profit because this area is kinda nuts, but now they need a place again. 

Are you planning to live off the profit of just one buy and hold property?

I just got a call from my realtor that said we have a buyer for one of our properties in Illinois that is looking to make an offer, but said they are hesitant because they feel they will have problems with the FHA lender due to our profits on it. 

Ever city varies in price so defiantly check into cost and time on this as if you dont you could end up losing a chunk of profit.

It does turn a profit and it does cover itself, but not enough.