Most say they do but later realize they don’t or have done limited 203ks in past 5 years.

It seems foolish to do something like this but where else can I get cash Flow; I understand appreciation is probably good no to be limited to none.

Going through the process will give you protection from potential complaints by the former tenant and current tenants (ie claims of loss of personal property.) 

You want to make it very easy for the tenants to renew early (limits their leverage) and inconvenient to leave.  

I also let them know via email or maybe a small gift card when I WONT be raising rates even though the power co did... gives you a chance to recoup a loss for idiots who leave taps on or don’t report a leaky toilet and also gives you a chance yo remind them you’re eating an increase that as a homeowner they would be required to pay.

Given the FHA limit of 468k, I am hoping I will end up with about 100k for renovation. 15% of this reno cost would be set aside as contingency fund to comply with FHA reno regulations.

An investor also has protection in regards to bankruptcy, filing losses and insurance.

However, you need to consider that over time taxes and insurance do go up, so if the margins are very thin in its present state with limited expected rental growth it might not be a viable deal. 

This will give you passive loss. 

For several years of tax returns, my parents' tax guy has listed one of their properties as a loss, but without reporting the income for that property.