The TurnKey Alternative may be a way to step in with some equity.

@Bill HenleyAs long as the borrower is not a disqualified party (below are some examples), investing in notes via a self-directed IRA is a popular alternative investment type.YouYour SpouseYour natural parents and/or your adoptive parentsYour natural grandparentsYour natural children and/or your adopted childrenThe spouses of your natural childrenAny fiduciary of your IRAAny people providing services to your IRA–such as your IRA custodian Your IRA administrator

In my area, Realtor.com seems to be the site of choice.  

Alternatively, should I try to find as large a house as I can afford with many rooms, then rent out to roommates/tenants instead?

But there are other alternatives as well that if one is creative can make it work within those constraints.

They have access to the data you need to make wise choices and they have the experience to guide you through the analysis, acquisition process, and operations.Hope this is helpful! 

We ideally would like to live in this property for 1.5-3 years cash out at about 10K - 15k and then make the jump to a more expensive multifamily home, duplex, or triplex which we can rent out.Any thoughts on this strategy or suggestions on alternative strategies?

I've lived in Memphis for 20 years (by choice!) 

Stain is ~$40/bottle and sealer is $200/5 gal.Tile counter tops are really cheap to install.If you do exterior repair on soffit or fascia, always go back with hardie, less maintenance over time.Places like surplus warehouse will give you a 3% landlord discount on doors and windows (and they're already dirt cheap).Capex is important to keep track of but with so many alternative options to pay for the expense, I don't stress too much over it either.  

Lastly if we would be forced to lose the equity by taking the loan on the ARV, what's a good alternative option for financing the rehab separately from purchasing the house?