Is the increased income going to be worth the extra time and gas money you spend on a longer commute?

On top of it your realtor is not receiving a penny for spending 3 months pushing your offer.

With this strategy, I spend about 5-10 hours per week "managing" this portfolio and it handily pays our families bills. 

It would likely be best to spend a couple of weeks there, if possible, setting up some meetings with property managers, realtors, and contractors.And I strongly suggest you get a property manager at first.

Be carful spending money to fix the repairs up since you will not likely get any more that what his deposit totals.

You can type in any city or even zipcode and it gives you all kinds of great info, household income, population, housing vacancy, housing stock age, mix of multifamily vs single family ect :https://factfinder.census.gov/faces/nav/jsf/pages/community_facts.xhtmlHUD produces occasional annual reports for most metros:https://www.huduser.gov/portal/ushmc/chma_archive.htmlThe Local County Website or city Municipal websites often have great research as well.Development is important in a growing metro because it shows you where people and business are moving.

Would it be better to bite the bullet and spend the $35k (will be using conventional loan)  up front as a down payment and have a home that could potentially be a rental when I move out in 3-4years or rent and pay someone else that $35k in rent over the course of the next few years.

In my research I found that hotels spend an average of 8% on marketing/sales. 

@Max Householder Thanks @Ralph Noyes I'm here to help. 

Best case she realizes you're serious and won't spend her rent money on another vacation