I would agree that it is "normal" to have that cushion and buffer - but yes, errors and mistakes are endemic in the servicing industry unfortunately

I've got a stainless whirlpool appliance package set to go in (no dishwasher due to space unfortunately).

Unfortunately, we've hit a snag with the property (thankfully very early in the project). 

He can keep thing going as they are (not growing in our current circumstances) but knowing we’ll have a newborn by new years he is contemplating freeing up his working hours during the week by selling the IT business which should allow him to grow his online business, without taking much more of his time.

If by "residential loan package" you are implying a "Mixed Use DSCR Loan" unfortunately doesn't sound like it would work since the commercial unit is larger than the residential

Unfortunately, it doesn't. 

The vast majority of the cost was in the installation.It's a good thought though - I'm pretty sure our current lender doesn't cover mobile homes unfortunately. 

I am not sure what the status of it currently is — already capped, I imagine.So based on my current circumstances, and in alignment with your suggestion, I was thinking that the best option would be for me to continue to live in this condo, continue saving up, and then combine my savings + pull equity from this prop to invest in an affordable investment property when I can, ideally after a year or so.

I've got a deep discount on a truly passive STR.I've got a lead on a deal that can be purchased almost $100k under list price given the circumstances.

unfortunately, they're not great at generating immediate, W2-replacing cash flow, even if you paid all cash, which is also something i would not recommend.if you want to dip your toe in the water and buy one - great.