A pro of the FSBO would be that you could control whom you got in as a tenant while performing a thorough screening process. 

First your mileage for performing your services. you can write off 57.5 cents per mile. your intial expense of going into business, your books, legal, and professional services, bad debts, and business entertaining. if you operate a home office you have a few other deductions that you can use. 

I'm concerned that whichever bank I go to would be hesitant to refinance because of my age/lack of experience, despite the fact that they would be refinancing a performing asset.

Part two is, how do these costs compare with the risks and rewards of other places to park money, like flips, hard money loans or non-performing notes?

Don't get upset yet,instead get a second opinion.Have a non VA appraisal performed to see the differences between them and the data that was used to come up with the new price.If you truly believe the VA appraisal was conducted incorrectly due to using incorrect comparisons,you can use the new appraisal as evidence when you appeal to the VA appraiser and their immediate supervisor.

I do leases with options to buy in Arizona but in this situation I would sell and use that money to either flip or buy rentals or performing notes (if you want more passive income) and you would probably  get a higher return than appreciation would most likely give you.

Hi all, has anybody ever bought a non performing 2nd note from Wells or US Bank?

They can all hold on to a few non performing notes now.

I have them perform credit checks and background checks which includes criminal and past evictions. 

If you can get better performance from your IRA investing in things like real estate and notes than in the stock market, then that can be a good choice.To compare investing in real estate with tax-deferred funds as opposed to non-qualified funds is not really that meaningful because the tax situation is so different.The question is not so much, "should I invest in real estate with IRA or non-IRA funds?"