However, my one issue has been that many times when I find a property I am interested in, I use the online property valuation tools and Rootstocks list price is consistently far above the given market value.  

Minimum monthly is $350 but I usually put a little extra to about $500 just to work it down.

Since I have been paying extra on the principal amount aggressively and the house value has increased quite a lot, my LTV ratio will be less than 80% with a new appraisal.

Can you afford to pay the extra both for the mortgage and taxes? 

What happens if the tenant does something illegal using your internet or if you have extra costs?

That's pretty easy to do when your overall competition largely consists of people who have trouble understanding the long-term outcomes of the bad business decisions they make and execute.

Some of this will be about your own confidence in how wisely you use that money, because of course taking out debt (and with the extra costs associated with it) can be dangerous, but if you're smart about it, taking that mortgage out might be the reason you're able to succeed later.

Scott's "Estimating Rehab Costs" book and cannot seem to find a consistent answer! 

BUT, the town had it listed as a 0 bedroom, and we cant add an extra bedroom.

I would encourage you to look at your broker exclusive agreement becuase that may add restrictions as to what you can do without paying extra money.