That Section 8 estimate was lower than the section 8 website stated, but I am intending on contacting the housing authority to verify what the landlord regulations and what they would be willing to pay for said home in the area. his original asking price was $35k, I've slowly worked him down to this point. upon more investigating it looks like the median home price for the area is around $40k, so I am wary about repairs. 

A proper tax strategy session can accelerate a lot of that and lower your income in the early years.

Thanks @Chris Mason would the rate be lower if there was no cashout component?

@Michael Le Don't think the market is big enough, less capital appreciation potential (compared to other options), renovated rent premium being lower than other markets. 

Some people don’t mean a lower cap as the investment is usually the safest and the stock market return is lower.

[Yes, some Lenders go to 75% for investments, but, might their appraisals be lower?]

I know FHA has a much lower downpayment than a typical loan but that comes with some guidelines. 

My friend (also military) has told me that I can refinance and lower my payment and I should at least wait to hit the year mark.

@Alex Franks I believe that most markets in the US are increasing right now, but I have looked at other potential cities that meet the requirements I am looking for with houses much lower priced.

I have been comparing expenses between my apartments in Berwyn and my apartments in South Bend, Indiana, and I am finding that the lower end units in South Bend are using up a much, much larger percentage of rents collected than my Berwyn properties.