Even if you are not in a flood zone, excessive rains and surface run off can cause water to infiltrate the basement.And from my experience basements have a stigma and are harder to rent and rent for less money.I'm not even a fan of finished basements in SFH. 

I really like the 1% interest I get with Ally checking and would like to utilize that to store excess rental income.

was the dehumidifier part of the hvac system to remove excess moisture?

SELLER CONCESSIONSSeller concessions include, but are not limited to, the following:Payment of the buyer’s VA funding feePrepayment of the buyer’s property taxes and insuranceGifts such as a television set or microwave ovenPayment of extra points to provide permanent interest rate buydownsProvision of escrowed funds to provide temporary interest rate buydowns,Payoff of credit balances or judgments on behalf of the buyerSeller concessions do not include payment of the buyer’s closing costs or payment of points as appropriate to the market.Any seller concession or combination of concessions which exceeds 4% of the established reasonable value of the property is considered excessive, and unacceptable for VA guaranteed loans. 

Once you dial in the up front costs as Todd Magin mentioned, I would model out a worst case scenario (high vacancy, unexpected capex) and compare to the amount of your personal reserve plus any excess monthly cash flow from w2 job/other.

For some reason I keep thinking it's excessive for my first house... but why?

If there is excess cash from the refinance after paying your sister you could use it to develop the land.Happy to help with the analysis if needed.

My big question is how Do I seed money into the second account to cover the excess mortgage payment or renovations to no commingle the funds ? 

For this reason a cash for keys in excess of the one month’s rent may be worth consideration (I would not do it, but many LL would).Make sure your family you move in is going to reside in the unit a year.  

Drama, late rents, damages, excessive maintenance, evictions, etc.