Despite the name Debt-to-Income ration, lenders will include your fixed carrying costs - debt service, insurance, taxes, licence fees, etc. - but not the operating costs (utilities, snow removal, property management, accounting, etc) 

Those are nice rations!

When you say 50% expense ration, what all do you include in that?

. - It would indeed be awesome if you could rationally explain to a bank how the numbers work on a real estate investment, but my guess is that unless you're dealing with a small community bank that doesn't want the property on their books, and would rather sell the property to an investor (and maybe even service the loan for them)...you're not going to have much luck talking reason and sense into a bank.Then again...it never hurts to try and hopefully someone can come along and tell us both who wrong I am and provide that secret sauce recipe.

When your business income wavers:1) A paid off home will have no mortgage, but your lack of income means no insurance payment, no food, no utilities.2) A good investment means you still have a mortgage, but your extra income pays for your mortgage, insurance, food and utilities (or at least contributes so you can ration and survive).So... which one is "safer" for a business owner?

Never confuse the two.The numbers ($$$$$) don't lie...never argue with them...you'll lose every time.Oh, and rationalization leading to fudging your numbers is negotiating against yourself.

I think your improvements that have been completed thus far are probably more than adequate to get a quality tenant in place.Remember it's business at this point don't let emotion of it being "your home" overpower rational decision making of it being "your income producing investment".

I'm a very logical and rational thinker and know tons about construction and that end of things but am finding my financial and basic business knowledge is pretty shallow comparatively so I am reaching out for direction to those here about where to start to look for books (etc) on business basics with focus on Real Estate.

Closer to home for us is the fact that those of us who bought houses we can afford (for the moment, at least), and bought using rational loans, get the reward of continuing to have a decent credit score AND continuing to be allowed to pay our mortgages.

If you only buy houses that meet a ration analysis, you'll miss out on making alot more money!