Total rehab costs are 40k) If I was doing it over I would pay more attention to MY contractors/ their bids and defining scope of work.

You did not include anything for CapEx (5% to 10%) depending on the current condition and life expectancy of all major components and appliances.  

@Harrison CookYour post kindles lots of questions.In the "good old-days" most heating systems were vastly oversized for the building they were heating - energy was relatively cheap, insulation was non-existant to poor ... so it was easier and safer to {drastically} oversize.Today, while energy {in North America}  is still relatively cheap for the moment,  we have a much better understanding of how to make buildings more efficient {though you might not think so looking at the construction industry in the U.S.A. and Canada}  and there are often more cost-effective measures than simply replacing an old, over-sized heating plant with a new, over-sized heating plant.You really need to - or at lease should -  perform a heat load analysis to properly size your heating system, a component of which, is determining the rate of heat loss of the building envelope.  

I define critical mass as: "Enough free cash flow to handle all my financial needs in life, create abundance, AND be able to actively expand my business or invest in new ideas as I see fit."

True enough on the SBA--they only do owner-occupied commercial real estate, defined as 51% of the square footage.

Without all the numbers, this is just my guess, but I feel like there's not enough money, definately not for both.

It's just not how the financial world looks at investments...CAP is a component of "commercial" residential multifamily...5+ units. 1-4 unit properties are often classified as single family (This is how Core Logic classifies 1-4 units)...The properties are valued by comparable sales method.

And it looks like from your numbers you are at about a breakeven cashflow right now, so I wouldn't recommend increasing your leverage anymore.There are two main components to your return - cash flow and appreciation. 

If you buy only one it will not make enough of a difference.Start by defining your target audience: who do you want to rent to.

I copied this from a search on real estate ROE:Return on Equity (ROE) ratio calculates the amount of return generated in a particular year on the total amount of equity invested (or trapped) in a property.The amount invested (or denominator) is calculated as the initial investment (down payment) plus the entire increase in net property’s appreciation and the entire decrease in outstanding loan balance incurred prior to the year the ratio is being calculated.Cash-on-Cash Return is a similar calculation, but since the two draw backs of the traditional Cash-on-Cash Return are that property appreciation and principal debt payments are not factored into the formula, Return on Equity adds these two components to the traditional Cash-on-Cash Return calculation.A property’s net equity increase is calculated by determining what the “Net Sale Proceeds after Taxes” would be at the beginning of a year, and then again at the end of the year.