I’m looking at affordable markets such as Columbus OH (any other market suggestions welcome) because my down payment and rehab funds are limited (hoping to stay at around $40k) and I’m hoping to do a cash-out refinance to get more cash to invest.

REI is sexy again, so more people want to do it and we all have access to basically the same information, chasing the same limited inventory. 

The best way to make the numbers work is to limit the work to cleaning, paint and carpet and avoid expensive projects like roof, windows, replacing plumbing and electrical systems, driveway etc - as these take huge amounts of capital, but will typically not drive up the ARV by much.

To limit your liability I would highly recommend you hire a property manager.

The loan limitations will be deed seasoning and your LTV max.

Lastly check your local landlord laws in the earlier scenario that you could command a higher rent basis will be shut down if your law limits the amount you can charge either by percentage or dollar amount per year.

You can bring additional cash to the table to purchase the replacement property, you’re not limited to the cash generated from the sale of the current property.

Are the deductibles and limits the same for each quote? 

@Suzanne Player Applecross limits the number of rentals in the development.

You could even work with a real estate agent and find properties that are listed (although this is very tough right now with limited inventory).