The owner of that property in question cannot restore his full VA entitlement until such time as the VA loan is paid off in full.Further, even if you gave him the 3.5% down on FHA, his DTI will still be hit with the payment on that VA loan, almost certainly killing his next home purchase before it even gets going.And if he gives up on homeownership, all the future potential landlords are going to see that mortgage on his credit, and likely consider him unqualified for the rental unit.Unless someone is going to write a check to pay that VA loan off in full, this is a predatory activity and the victim is the owner of the home in question, given his goals and the proposal on the table.Do the right thing.

Also, I want to have an additional income stream to my pay. 

Do I have to pay to clear /paint or fix the driveway?

because of the issues you guys are facing. now maybe these folks are paying cash to build as well ?

Would I be making a mistake paying the $997 for the Bnb formula?

Start working right away and you could have a well-paying job, be debt free, and own a couple investments within four years. 

That would save you a ton on income taxes.

Maybe put a few into DST's to avoid taxes, and maybe put a few into regular syndications where you do have to pay the taxes on your sale. 

Folks are fighting to pay $700k for a duplex here with market rents of $3,500.

Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable).