Can we DSCR out of this to get our money back out or will I need to sell it to get our $136k total investment out?

If you have any equity in the place, then try and sell it. 

@William Taylor so many options...Use your RE knowledge to: WholesaleFind rental deals to sell to investors locally or here on BPStart leveraging your personal contacts to build your sales businessFind a motivated seller willing to do seller financing:- Move in worst room or basement, rent out all the other rooms for max cashflow- You could even live in the basement and STR the rest of the house

 If you start selling houses in Virginia now 2.5 years from now your business would be humming along.

We would love to work together with a organization that sells the property and has services like rehab network, financing, property management. 

Since you are only selling the development rights and not the entire property, the existing mortgage on the building does not directly impact the 1031 exchange of the development rights.

I do not see a path to refinancing and see the better option is to sell the property.

This is great if you are force appreciating the property and then moving in for a year, and after selling or renting it out. 

In Texas we can go inactive, so no Broker, no selling, no MLS access,  but you still have to keep up your education CE hours and such. 

I work for an investment brokerage that specializes in acquiring and selling great real estate investment opportunities.