It gives you access to funds at a relatively low interest rate, and you can repay it as the rental generates income.

Could you double in your income and invest that?

The tax savings could be larger than the regular income. 

Also, for DSCR, they do not use the actual rental income on tenant-occupied houses.

However, when you combine the income from both the units, I think you will end up with more income after a year or two than with a SFH renting by the room.  

Our instincts are to eventually rent it and use the income for payment assistance on a new home mortgage.

I paid for the subscription for a few months and drew my own custom Google maps areas and color coded them red/yellow/green based on a "grade" I felt came from a few metrics like crime/average household income/etcI also really like realtors dot com new maps, if you search for an address and click on the map and then go to the top left and choose the Value slider it will give you a nice color coded map of which areas of a neighborhood are higher valued.

If you are looking at this property from a residential and rental perspective, then it may work as long as you are willing to put your own income into the property. 

Not a rookie - While I have never purchased a home without an agent, I have purchased two homes in the last fifteen years in Denver and, at some point, managed both with some form of rental income, plus helping my mom manage the independent basement apartment in her home.

I put the cash from the refi back into more mutlifamily units that produce more rental income.