Are there ways of finding properties that are under market value but still pass the VA standards in order to create some kind of forced equity? 

In your scenario, all you did was screw the seller, which may lead to him damaging the property and forcing the new owner to evict which also screws the owner.

Or do I actually have to wait until the trees fall before I can force them to do anything?

When I bounced this idea off of my boss, (a real estate investor himself) he said that the 2nd option is a bad choice because I would be forced to pay a capital gains tax because I wouldn't be living in the house first.

It costs an arm, and half a leg, but at least you can remove the liability from your shoulders and make the tenants responsible for their usage.

Businesses and people are going to respond to the forces around them, incentives and disincentives.  

Or if you have target to pay off early you can go for ARM product which will save little more on interest rate. 

I am an accountant by trade but am ready to get my Real Estate career in full force.  

And unless you have previous construction experience, I would stay away from getting involved in a major rehab project on your first rental.A huge rehab (for your first project) could mean you end up with a partially torn apart duplex with no tenants and not enough cash to finish the project literally forcing you into a distressed sale or worse.IMO its more important to learn the process of being a landlord and be fairly safe by buying a rent ready house than it is to make a huge return on your first property. 

PMI has become a dirty word, like ARMs for all the wrong reason.