I work at a community bank that has ties in your market and your rates aren't too terrible from what I am seeing (on commercial loans, I have no clue what residential loans are going at) . 

I do however love the entrepreneurial aspect of real estate investing because my success is more tied to my ability to learn and apply effort.

Setting that aside, do people feel like there's a clear winner between the two: (1) FHA with 5-10% down, leaving us more free cash but a higher monthly pmt; or (2) putting 20-25% down with a conventional (or Investment) which would lower our monthly payment and avoid PMI, but tie up a lot more cash up front?

Their payment is directly tied to lowering your assessed value so interests are aligned.

lol. ive moved on it just sucks when a property im really interested in is tied to a unresponsive agent, oh well!

- Other than the SHORT TERM tying up of the money, what are the disadvantages of this route?

Plus single payment each month and a stronger relationship with one lender.

IMO, you may have cut the plumber tie too quickly.

I refinanced my personal residence from a 15 year to a 30 year to invest the tied up equity. 

The Last thing someone facing foreclosure needs is someone who can’t actually buy tying up their property for a month or so, Hoping to flip it to an unknown buyer.....when you fail, they now have no time to sell it to a real buyer before foreclosure.