The first thing you’d need to do is figure out who imposed the restriction.

, whether there's a high water table that encroaches on any underground utilities or foundations (and does that water table have significant seasonal water level variations), encroachments by roads or other improvements on your property, limitations imposed by easements or rights of way, etc.

Each property qualifies on its own economic merits (i.e. rental income covering PITI payments)This is one of the main advantages for DSCR financing, i.e. the ability to scale without any kind of DTI limit imposed by conventional financing.

@Ricky Hernandez  We bought in two different communities that had no rental restrictions then later imposed cap of 10% rentals. 

Since downtown development land goes for $30 million/acre, $100k imposed by the progressive city government for a 40 story building permit is a minor annoyance.

If you’re working with VA-savvy lenders who are comfortable with your plan and don’t impose stricter rules, you might be able to rinse and repeat as you described.

If they do, then you can likely find another tenant for that amount fairly easily, as I would assume the entire town's taxes are up- so if someone really wanted to be in town, that price is the new normal.If your taxes increased that substantially in a C neighborhood, your tenants would way more likely give push back for that type of increase- even though you're not being greedy, you're just imposing the same raise you were given.Often the buyer who had the "well, the numbers are better" mentality is only looking at year 1. 

Quote from @Miguel Garcia: If I look into investing out of state should I look to get pre approved by a lender in that area or would a lender in my area be fine?

I hope you have a lot of cash available to cover the FTC fines. 

Compare my bottom line to those who claim it's fine to invest where you get a $100 a month cash flow and sometimes actually even get rent. ;-) IMHO Thank you so much for your insight.