With that kind of equity, the elimination of mortgage insurance will offset the increase in rate (or at least soften the blow). 

Everyone is going towards the low hanging fruit (which I get), so I'll stay back and increase my hustle for my desired deal flow.

Do you think it's better to do a FHA on a true duplex and take the increase with the mortgage insurance or to do a cheaper single family where I could create a basement apartment as a makeshift duplex paying the 20% to keep the mortgage low and easier to cover with the rent it would generate?

@Clarence Powell Start with a specific plan for your businessIdentify your farm areaGet a contract ready so that you're prepared to make offers on properties as soon as you find themStart MarketingPut together a buyers listRemain patient, methodical and consistent, it can take months to get your first deal, keep at it and you'll increase your chance of success

If anyone knows the Virginia market, this property is located in Petersburg, VA in case that influences your feedback.I have negotiated subject to and owner financing to purchase the deal using the following structure: I will pay $8k in cash I will take over the existing $59k mortgage payments (28 years left) of $506.70/mo PITI paymentsThe owner will wrap the remaining $8k into a second 15 year mortgage of principal only payments of $44.44/moTotal monthly payment $550/moThe Deed of Trust will transfer to me at closingI will sell the property via Owner Financing to a tenant buyer using the following structure: Purchase price $85kPay $10k downI will finance the remaining $75k for 10 years at 10% interestMonthly payments of $1000/moBuyer may cash out anytime after the first 5 yearsTenant buyer covers repair costsDeed of Trust transfers when tenant buyer cashes property outBasically this strategy is a way to get all my money invested out of the property and avoid typical rental property expenses to keep all of the cashflow.

For example if the property is $100k and a 5% increase or $5k breaks the deal for you, it may be time to beef up your reserves.

(military isn't bad, but new leases every year or so from what I've heard and very few casino workers as the closest one to yucca valley is 29 palms)I have found the area to be very misunderstood - as people driving by assume meth labs, sex offenders and neonazis  ---  when instead you find millionaire horse/animal lovers, older retirees who feel like they have found shangri-la, and an increasing amount of younger LGBT creative folks re-creating identity in the serenity of the desert. also, $15/hr minimum wage law is underway - going up $1 a year until $15 in 2020. 

So while the subsequent tax bills will not include the interest and penalties that were included in the tax sale amount, it will have an increase of about $1000 in taxes assessed because the homestead exemption will be removed.

Rent has gone up (and will continue to) and property prices have increased (and will probably continue to).

Yes, HOA has been increasing over the years and eating more of my cash flow.