I understand that financing requirements for rental property is more conservative.

AND, since my name isn't on our first home, I can tap into the first time home buyer perks, only put down 3.75% which is LESS than we put down initially, AND we can set or 'force' the value of the home anywhere in that spectrum (within reason, certainly, but without the fear of a conservative appraisal)- possibly pulling out enough for multiple down payments. 

Put a 1/3 in a conservative wealth preservation strategy with a minimum 6% target return and make sure this investment value does well in a 2008 like market crash.

That is the Fannie/Freddie guideline and it is within the right of a bank to be MORE conservative if they want.  

It may be due to the fact midwestern bankers are more conservative, but a prudent banker would be unlikely offer you a LTV on an ARV and maybe let you cash out more than what you put into renovating, unless your cashflow significantly improves or if you have a strong bank relationship, you may be able to leverage it a bit more.Personally, I come across these type of deals quite often and I would simply buy the house and keep it on my books all-cash, and by the time I complete my renovations and bring in a higher lease, my banker would usually build the financial package at the new ARV asset value for a more attractive financing structure.

However, I would caution that a lender re-financing your property will be super conservative...and the appraiser can consider other comparable sales...even if your property has a CAP rate that says it is worth $600k...if similar properties are not selling at $600k, odds are you're not getting a re-fi based on the income the property produces alone.That said, increasing rents increases value...so there needs to be an upside...what do the units rent for now...are you renovating any...and what are the potential rents...that's your silver bullet. 

I'm thinking that starting small since I am starting out of state would satisfy the conservative side.

Keep in mind that the appraisal on a refinance will typically be more conservative than on a purchase. so you may want to wait till you are at more of a 75% or 70% expected ltv to give yourself breathing room for when the appraisal comes in lower than you expect.

I would get as many opinions as you can, and implement a conservative strategy on pricing your rehabs so you have a little extra wiggle room when things don't go as planned...

I personally don’t let this number drop beneath $1200 per year since I’m a bit conservative, but if it's turnkey and everything is in perfect condition with all new systems I could be convinced to reduce this number a bit.Capex – Since you include your capex within your maintenance estimate of 10% I think it’s probably too low.