An I believe your lender is referring to the fact that owner-occupied properties are viewed as lower risk for Banks' Underwriters thus the terms are more favorable.

Second, how do you avoid surprise tax increases, or is that just a part of the risks?

Wait until my final year of school to start purchasing or, 2. start purchasing this year, and risk losing 6k a year in tax free money.I found a 912 SqFt 3 Bed, 1 Bath home on HUD for 22k, it needs about 7k in work.

That way you don't run the risk of shrinking your buyer pool, because in the end, every little extra add on money-wise is a deterrent to the end buyer. 

Looking to learn more as much as possible and get involved in my own deals.  

I just don't see much risk with the situation I mentioned above, unless of course I am completely without a job and wasting away my saving. 

What I dislike about the three CPAs I have used in the past is that they charge by the form (my taxes involve a lot of forms!)

I developed criteria that reduce the risk that the investment does not perform well.With that approach, I am about 2 more properties away from achieving my goal.

I sell a house that has underlying mortgage still on a land contract, which put me at risk for a due on sale trigger (understand the risks of note being called from many prior posts).2.  

As I am learning, as with any investment there is inherent risk.