You best bet would be to a conventional loan to take out the equity to do the flip.

Your best bet it an accountable plan in which you submit expense reports regularly.

Taking that high(er) income and playing "arbitrage" into some other areas is a great bet.  

Are the rents really 900, what size are they 1 beds, 2 beds.Check rentometer.com for market rentsGino

Personally, I would think that free and clear (with cash reserves, of course) is the safer bet, but lower potential return.

That being said, they would have purchased my last flip but it didn't suit their needs size wise, so I believe we have similar tastes from a design standpoint.

I think ours is reasonably priced given its condition/size, etc.

Another thing to keep in mind is that some places require the plot of land to be a certain size if you want to convert to a duplex.  

A few months ago around Christmas time we were doing a bathroom remodel for a new homeowner on a house that was flipped, the master bathroom was a disaster, there isn't enough space to go into all the things wrong, so I'll just tell you about the bathtub - jetted tub they bought from Home Depot, so it was a de-engineered Jacuzzi model, low horsepower pump, less jets than the non Home Depot version, but it looked new and shiney. 1) Tub wasn't sitting on the sub-floor, was suspended by it's rim, even it they had built the tub deck correctly to size based on everything else I sure they wouldn't have poured a mortar base for it to sit in.

I really want to build a nice size portfolio and have tremendous CF by the end of this year but I need to start now.