@Paul Stern Are you on the accrual method or cash method of accounting?

Well;  banking is not my business - so my knowledge is only experiential, and banks may well having varying methods of underwriting and ways of assessing / managing risk.  

Needless to say my debt to Income ratio is all out of wack using there method.

@Tyler Beley method ive used in the past and its worked: search for Sold listings under $50,000 in whatever search you use such as zillow. typical/conventional mortgages are generally not available/difficult to find under that price threshold.

If you are interested in his methods you can find him on you tube,  look under Systems Saturdays.

Assuming your bathroom is an average size (5' x 8') the additional cost of replacing maybe 4 sheets of drywall versus the labor intensive method of patching, floating and sanding the existing walls, and hoping you get a uniform finish, is a no brainer.

Hey,The best method to find a property management company is to get a referral from another investor.  

I am feeling ready to get start with the initial goal of purchasing a multifamily property, hopefully locally, but will consider broadening my search for the right deal.

@Joe Villeneuve , what a creative and interesting method to free that cash that is otherwise tied up. 

Not over your head at all...Congrats - you have some good ideas....What I would suggest is a prop that is lower than market based mostly on cosmetics...flooring, paint, minor drywall, possibly cabinets, etc...you can get substantial discounts & still get the 1st time buyers rates & programs & such - then hold for a few years & possibly rent it out....or another option would be HUD foreclosures - they have (in our area at least) a 10 day "owner occupant priority" - before the true investors can even bid on them....much less competition....you may want to look into that avenue as well - Whatever your method - congratulations...