I attended the FHA home owners education class and received the certificate of completion, so I am working with the lender on the 3.5% down and down payment assistance, so I have less money out of pocket and can focus more of my funds on renovation and increasing equity.The properties I am looking at either have basements that are finished, or basements that I can finish myself to rent out separately either on a month to month basis, or as an AirBnB, or they have detached garages that are big enough to convert to a studio, or AirBnB. 

@Jermaine Riggs   Remember the 6PsPrior Planning Prevents P*ssPoor Performance There are steps that you can be taking today that will better ensure you will be able to qualify for the best of terms on your purchase in TX.1. have a Mortgage Broker run a Tri-Merged MORTGAGE credit report and pay the extra $15 for them to also run the "What If" score increase simulator to know how best to pay down debt in the interim2. start eating MREs and saving like a maniac until you close as the more money you can show in reserves Post-Closing, the better the programs you can qualify for.etc,etc,etc,   

I see opportunity for a healthy NOI increase within the same time frame.

it is a mortgage, but in reverse.. the interest is added to the loan each month.. so instead of his mortgage balance going down, it increases every year.. it will all depend on what the original number the back put on the house at the time of the loan, and how long he's been in this program.

What would be the best percentage to use when analyzing income,expense,prop value increase? 

Not many realize but a lot of them are on fixed income from year to year so they face challenges with costs going up every year.It should also be a lucrative business with the increase in population of the elderly in the future.Good luck with everything!

Which is what is super appealing to me especially if it needs some work that can increase the value.

Focus on the long game.If I were in your shoes, I'd be thinking about increasing my portfolio (1 unit to 2-3 units). 

The simple answer is an increase in the interest rate!

Both areas also, with the exception of the financial crisis, have consistently increasing property values.