I would also look into banks who might offer a ARM loan with 5% down to hopefully get you into a lower mortgage rate percentage since you are looking to refinance again in the future, the ARM shouldn't be too much a problem and you might obtain a better mortgage rate. 

The first thing you will need to get your arms around is why the property has such high vacancy. 

A 25 year 5/1 ARM.

No matter what you may read or hear from others, real estate investment is not an arm chair activity like, say, buying a bond. 

Also if you are planning to sell this property fairly soon (5 years or less) there are ARM loans available.

A cash-out will initially have a higher rate because it is a fixed-rate, not an ARM.

Here is the catch 22: If you refinance owner occupied you tie your arms not being able to do another FHA in the same area.

I'm not an attorney:IN THE EVENT the Tenant is, or hereafter becomes, a member of the United States Armed Forces on extended active duty and hereafter the Tenant receives permanent change of station orders to depart from the area where the Premises are located, or is relieved from active duty, retires or separates from the military, or is ordered into military housing, then in any of these events, the Tenant may terminate this lease upon giving thirty (30) days written notice to the Landlord.

Financially you are better off with a low down conventional loan, even if it is a portfolio ARM - we have a lender who requires no PMI on a 5% down.

I have everything at one local bank and all on 5 yr ARM.