I want to ensure I am doing this transaction the correct way but I also don't want to spend extra money if it isn't necessary.

How difficult is the property to rent out?

That's a waste of an extra $800/year + tax prep & accounting costs.

I'm sure the Ontario power folks would love an extra 2700 x pretty well every house that is currently heated with a gas furnace.

We knew we weren't building a ton of equity when we did the renovations (we spent extra on some niceties because we will live in it for a few years until we want to rent it).

Where FHA deals can be more difficult, I am having trouble understanding how that alone is preventing your offers from being accepted and, where inventory is very low right now, suspect the $100k approval is what is limiting your choices most of all. 

My ideal CPA would own Real Estate themselves.Having difficulty in Sarasota.  

That being said, if you have the extra money to raise a house, now may be the time to strike in Staten Island!

He said he wanted to redeem for 125-127K, basically make extra 5-7k.

Chances are they already have one written that you could use, or at least modify with minimal extra cost.