I guess my other question is wouldn't cash flow potential increase over time as your mortgage cost (the interest payments) decrease and you can increase rent. 

You get 13%.Increased Scale, Less Risk – You’re investing in a former hotel with 23 upscale units and a view of the Cali River.

Then within 1 to 2 years move out by buying another place rent your old place out you lived in and continue to increase your positive cash flow.Remember, cash flow is king!!

As for partnering with a lender, would you mind going in depth of why I'd need to partner with them and what the conversation would consist of?

I'd love to get started with a strategy such as house hacking a duplex, but it looks like I'm going to need to show at least 2 years of consistent business income (with extensive documentation) before a lender is even going to give me the time of day.

I know that increases the payment and adds PMI but I think we could find a program with a reduced or zero PMI option. this would keep more money in our pockets for other investments or rehab work.

It is a Fannie Mae ARM with the first year being X and the remaining term of the loan increasing and becoming fixed by 1% the following year for the remainder of the 30 year loan.

I have a long list of potential cities, but am having a difficult time narrowing that list down using any sort of consistent standards.

Some of that would also be used to pay the ~$1500 in closing costs on this new loan.I understand that this increasing how much we are leveraged greatly(by 34k). 

Your number one priority should be increasing your income.