It appears you are using a lot of assumptions in your entire BRRRR deal.

If I'm wrong, I'm wrong, and I apologize - but if your posts keep looking like this, I won't be the last person to make these assumptions on BP. 

The first three are easy to calculate after having made a few basic assumptions, but I need help on #4.

My assumption is that there isn't a loan in place, as most lenders want the taxes paid through the escrow they hold so that they don't end up in a situation like this where they could lose their asset when the owner doesn't pay the taxes. 

The assumption is you are just trying to buy investment  property illegally with a low down payment fha loan.

You are using the assumption that you only need to pay the minimum loan payment on either product.  

Making an assumption about an area you don't work in on a daily basis is ignorant.

You make some assumptions.

Important to get the work done on time so the house can be listed and sold before the balloon payment is due...Other option would be to find individual investors that will fund the purchase and rehab with the assumption that they will either split profits or be paid a compensating interest rate.For buy and hold, you can use private money, partner with someone that has the credit/money.

Your assumptions seem reasonable: The area is most likely a B caliber area.