@Matthew Paul - When I saw your temperatures I was blown away, I had to do a double take and google the location to make sure I read it correctly. 

There is a "partial exclusion" exception, and it should let you exclude everything except depreciation recapture, as @Dave Foster correctly pointed out.

If I remember correctly, United Real Estate is 100% commission but fixed $500-600 fee per transaction but $65/month.

Loan and line of credit, bother with two different name with same meaning...correct?

@Christopher Phillips correct, margins are slim.

This method may require you to move into another rental yourself as many lenders need you to have a tenant renting your home for at least a year before they will count that income to offset your mortgage payment so you can qualify for a new mortgage. 

However, 2 4-plexes are slaves to comps so in a correction, you'd lose value.

Judging how the rents are $475/month, I'm also guessing this is either a C/D area or a very small town, which may contribute to higher tenant turnover, higher lease-up times, higher possibility of missed payments, evictions, etcRepairs at 5% also seems low, especially if I'm correct about the tenant quality/neighborhood this is in.

Good points made here but I want to correct @Russell Gronsky on one thing.

I am wondering if anyone out here has purchased a property using this method.