You listed Mortgage Ins - implies you expect to get a conventional loan with less than 20% down; I think you need to research actual financing that might be available before assuming the numbers you did.Expenses related to a loan aren't of concern here for the building's expenses (although the loan debt service will reduce your net cash flow).

So your effective tax on the income will be reduced anyway.

So don't be hesitant to reduce your offer accordingly.

Assuming the HOA includes exterior maintenance, is it prudent to Reduce CapX and /or repairs to something like 5%?  

Do what you can to reduce your risk as long as it is in compliance with laws that govern your jurisdiction.

This would have the added advantages of lasting longer, and reducing my insurance payments by about $80 per month.  

With research I've decided that the FHA loan will be my best bet to reduce the down payment to a reasonable level.

In my opinion for this deal to make sense I would ask the seller to carry the note with little down and have them reduce the cost of the houses to get you to a min 10% cap.  

Not sure what your index is on the equity line but they might be willing to fix the loan rate, close the end and reduce the margin which would reduce your note rate.

I have the feeling this would greatly reduce the number of deals the wholesaler is able to tie up.While I am usually no fan of government regulations, the licensing of real estate agents makes sense from a consumer protection standpoint.