My plan, detailed below, was to purchase houses in good neighborhoods/schools etc. at below our means that was around an E6/7/O3 BAH rate and then rent it out for the long term for either when we moved back, or appreciation over the years. 

The answer to your "fully occupied" question likely depends largely on the Owner-Occupier vs Investor market in that particular neighborhood (eg. desirability of school district).

For the first question, homes in the neighborhood are going for about 8-10k more with the finished room then not.

While doing research on the Tucson market, I realized that a specific neighborhood was going to start appreciating rapidly; Barrio Hollywood.

It is in an "A" neighborhood, and anticipate my current neighbors won't be thrilled. 

I contacted a police officer I happened to know, and he came to a meeting of our Neighborhood Watch group held at my house, and consequently saw the activity for himself.

@Logan Allec I guess I am just looking for a perfect fit instead of just making it fit.

It's called a casualty loss, and those rules got more complicated with the new tax bill, you'll need to speak with a CPA to find out how it'll fit your exact circumstances because generally the casualty loss deduction went away in 2018.

They may have limits on the number of rental properties and often are militant about neighborhood rules.The "little" HOAs don't scare me at all. 

In NYC, cap rates are hyper local and vary from under 2% in high end Manhattan neighborhoods, to about 5.5% in parts of the boroughs.