I feel like as I get to know the market I am finding lots of great deals but I don't have the capital to take advantage of them.

You sound very nice and they may be trying to take advantage of you as well. 

And even then it's awfully rare that someone takes advantage. 

I am planning on moving into my rentals before selling them so that I can convert them back into owner occupied to take advantage of the 2/5 rule.Best of luck. 

A couple of the reasons/concerns I am considering this:-Difficult to go the BRRRR method in the current market and actually find a deal (too many non-Texans, like myself originally paying way over market value on MLS)-I liked the work the builder did on our property, and we would ideally build a base model without much customization, and add forced appreciation in the second home while we live in it over time-I would like to take advantage of the current rates, as well as my VA benefit with the best strategy possible in starting the rental journey-I know our current home would rent and cashflow well (only con/concern is that our upgrades are on the higher end, rather than econo-rental-friendly: porcelain wood-look flooring, granite countertops etc.) 

Opportunity costs are real, glad you took full advantage of the equity at your disposal.

I think the due diligence fee falls squarely in the category of "stuff buyers do in a HOT market when they desperately want a deal and simply don't know any better!"

Investors with the ability and confidence to walk into a property and accurately estimate rehab costs have a huge advantage in this market, but it looks like inspections periods are becoming deal killers – at least in hot markets.Are inspection periods killing deals in your area?

To me, the biggest advantage for OOS investors is having somebody local to quickly access the property for inspections, showings, etc. 

Supply is low at the moment so being quick has advantage.