I contacted a local bank that I've worked with in the past to get their thoughts and we aren't at their desired LTV ratio to get a 2nd loan so our discussion ended.

Get out of town, literally. 3.5% cap rates just aren't going to cash flow.

I see this as ( at least for me) if I was going to buy those I would have to be creating a business out of it and be buying them in large quantities each month..

(Even if the docs aren't perfect it doesn't really matter since the money is essentially being lent to myself via a friend.) 

You can put your equity into a nicer neighborhood with better tenants and less capital expenditures (if you aren't already in a nice neighborhood) and also reduce your involvement by hiring a property management company.

@Mary Bodrato banks aren't landlords and they don't like to hold on to properties.

What is the maximum amount of time a tenant can occupy a property that they aren't paying rent for?

Think of it from the agent's perspective- you want them to go through the work of finding, showing and contracting on a property that you aren't planning to buy; you're just tying it up and hoping someone else will show up who wants it.

We have been buying properties since 2000 and continue to search for suitable projects when we aren't busy funding.Thank you,Karen

Find someone that will treat you like an intelligent adult, who doesn't put expiration dates on preapproval letters so that, again, you aren't feeling time-pressured to move before you're ready.