My son is stationed at Dam Neck, and my daughter and son in law are going to that command from Pearl in about a year.

Commander.

I bought 2-300 sq. ft. comm and 1-700 1 bed condo 2 years ago and 1-680 sq. ft. 2 bed condo in May, have about 380k in debt (25 year fixed loan) and about 250k in equity in the units. 

The fact of the matter is, the bigger you are, the more respect you command.

If that doesn't work, move up the proper chains of command in the city (city engineer's boss/head of DPW, etc.). 

Does it require repairs and renovation before commanding such a high rent at that purchase price?

If your command is across the sound from Seattle, you should actually be considering Bremerton for a place to live.

From an ROI perspective, I currently rent the unit for $525/month and with the 2nd bedroom and renovations, property manager thinks we can command $800/month.

My thought is if you have little to no experience and no money ( even if you have good credit) then you tend to have very little value to offer and can't command  half.In those situations you take what you can get as the person with the money is taking a higher risk with a newer investor versus a known investor that is very seasoned and experienced.Once you start getting experience then you can start looking for better sources of capital or renegotiate split of the next deal with current investor once showing a positive track record of success.  

For me, I like to buy and rent to military personnel because I know that they have a guaranteed housing income (unless they get in trouble at work or something and get it taken away) and will pay on time or my property manager can just contact their command.