If I'm not paying 30% below market value, it's a bad deal.Here's my question: How does an analysis with a -$647.84 Cash Flow / month have a positive $53,189.20 NOI?

Depending on how much is offered, 2nd liens position and guidelines, will determine if they will accept it or counter.

Just buy rental units that have positive cash flow on day 1. 

I strongly believe that even if I buy a cash flow negative property here, it will be positive within a few years.

"What should I do to improve my position with my 40k in equity that has income with out a time constrant?"...............

I would just not want to get in a position where I'm trying to shop a deal around and can't find a buyer. 

Actually, the equity isn't really earning anything if he has positive cash flow since he isn't saving the interest payments because his tenants are paying them. 

I was planning on self managing since its just a single family home and I'm not going to have any positive cash flow until at least 2 years so I don't want to give up another percentage to a management company.

I'm not an attorney, but I'm basically positive that kind of thing is considered illegal if he's just trying to jack up the HOA fees to get others to sell at a discount.

One example and there are many, would be a private money lender with a first lien position.