From a financially rational point of view, the best debt would be that which produces the greatest amount of income, while the worst debt would be that which absorbs the greatest amount of income.

Your own numbers did...and the numbers don't lie...so never argue with them.What it sounds like is you're looking for someone to "rationalize" this into a good deal.

The building would still survive in this fictitious dire world ... but would not be the best use of your capital if the opportunity cost is 8% -;   The ROI would be only 4%, the CoC 5.5%, but your debt coverage would still be 1.55 (good) and the Break even ration 72%.  

Anyone can not only promote anything on BP, but help find ways to rationalize their actions and minimize them by making BS claims that sellers could not understand what these guys are doing!

A business sector that is leveraged beyond what is economically rational is more risky than a business sector with a more efficient debtto-equity composition.

Since the paradox assumes the donkey will always go to whichever is closer, it will die of both hunger and thirst since it cannot make any rational decision to choose one over the other.I have similar thoughts looking for other markets.

Rationally play the numbers out ahead of time...determine what potential costs will be using the various options presented.  

Here in Canada, with certain restrictions, if the property is being purchased by you for an immediate family member, the you can qualify for a high-ration (CMHC insured) mortgage (5% or 10% downpayment pending the type of property).  

Don't rationalize negative cash flow as being anything but bad....and as Rodney Dangerfield said, "Don't step in #2"

Plus you'll need to qualify on rations for the next purchase.