I have a great credit score and a good amount of money saved.

The remaining $1.2M has not yet been accounted for.I can easily find more investors to fill in the remaining $1.2M, but I was wondering if there are banks that lend money to syndicates that could fill in the last $1.2M at least in part?

By not increasing rent enough each year you're losing money (this is the truth).If they push back hard or say they're leaving, you can always negotiate and back it off a little.

You are losing money on both properties. 

And would it be worthwhile investing to rent? 

The algorithm has no idea if the problem as a dysfunctional layout or just the fact that it is dated and nobody has spent the money to update the property.  

So you'll be putting out quite a bit of money to do that, and when you sell, you'll most likely have to convert it back.   

If you are out of money on this, it's time for creativity and elbow grease! 

The other route you can look into is purchase+rehab loans if it's going to be a primary, if it's an investment then using hard money, bridge loan, or DSCR.

-The other heirs didn't sign any documents to sale the property or received any money.- The property is now worth over a million dollars now.