Surprisingly enough because of low taxes and interest rates the numbers in certain ways seem to work out. 

It was listing my team had that started out at $285,000 - price kept coming down so it interested me and I am building my passive income portfolio - this has cash flow of approx $1000 / mo after the mortgage and before taxes and insuranace.

IF (big IF) your not in love with your current house you could sell it, taking equity gain tax free (if 2+ years living there already) and then use that money to house hack a bigger or multi property.

my monthly income barely breaks even with taxes mortgage etc..any advice is appreciated. thanks

By being outside the city (the city line is a few blocks away), you save on city wage tax. 

I am 100% Disabled veteran so i don't pay property taxes, God I love Texas, but will that apply to the second home too?

; or-- you wait until that income from your midterm rentals show up on your tax returns as simply "rental income" for at least a year.

If you pull permits and renovate, both your property taxes and insurance are very likely to increase, causing your cash flow situation to decrease.

I have not yet encountered a tax year where I've had to work through and claim income for flipping, but that is coming up in a couple months.

I can put down 25% considering this will be a secondary home.Reason for considering SFH - No prior RE experience, Tenant Class, Newer construction - no existing problems,newer townhomes are priced starting at 420k$'s ( higher HOA and still has a shared wall) Looking at 4000$ max as monthly expense( mortgage+insurance+HOA+ Property Tax ).I say expense , assuming the residence is not occupied immediately (Vacancy) .