I would like to rehab and or expand the house if needed to force appreciation (like buying a 2 bed and turning it into a 4 bed).

The amount you receive from ordinary income (401k distributions) is combined with your social security (after you start collecting) and due to its ordinary income status, can cause you to pay taxes on SSI....reducing your available income at the whim of the government....in retirement when you don’t have many options to generate income in a typical retirement situation.If you’re working a W2 for a while, and investing in your 401(k) at the same time-getting the match-you’ll be contributing to social security taxes today, and will be “entitled” (ie, forced to take) them later.Also, a lot of 401(k)s have 1.5%+ fees in the generic options...enriching Wall Street to almost as much as yourself with “free money”.I recommend you read “The Power of Zero” by David McKnight and “401(k)aos” by Andy Tanner.

Please do not focus on the loss on the transaction (other than it impacting the conveyance tax). 

The property has plenty of room to force equity and rents are a couple hundred per month under market, so growth potential is there.Percentage wise this is where I wanted to be (north of 20% COC), but from a pure revenue perspective I am only going to be cash flowing +/- $300 mo. instead of the $1k I was looking for in each property.  

This cost is really impacting my cash flow as you can see and since moving the location of my rental is not an option, does anyone have a recommendation for insurance providers or other resources to help reduce the annual cost of the rental insurance? 

I disagree with the other posts saying rents don’t impact price for 1-4 units.

Don't get nervous is yours takes longer.As an owner you need to understand that EVERYTHING about your home impacts how long a house will be on the market. 

I'm new to the forum here and my career for that matter ;) My Dad forced me to listen to BiggerPockets podcasts and audio books every summer I worked with him.

For ex : A typical HML loan will be around 10-12% , yes there various levers that will impact but I wont get it for 2.5% . 

That’s no forced equity, no inflation, no scarcity of inventory, no infusion of savings, bonds or stock money searching for any returns above 1/2 of 1%.