The 2nd part of the question is which option maximizes the true revenue potential of the property ?

I'm not smart enough to work out the math of which option would be best, or how long it would take for the syndication option to overtake the DST option. 

Mathew, From my perspective you need to talk with local real estate investors and a quality realtor to determine what is needed as well as paint choice options.

Start there it will offer many more options and choices than the 'loan officer' at your bank branch.

Unless they are for some reason resistant to the project, it should be them receiving the funds from the state to expand their utilities, not you needing to lobby the state.  

Now, consider some solutions: submetering is an option, allowing for individual usage tracking, but be cautious about upfront installation costs and regulations.

Pricing and rates change constantly so if you are seeking cash out of a rental property you can entertain a second DSCR equity loan up to 70CLTV to keep your first in place or take a look at a full new cash-out option.

@Stephanie Gledhill The credit union you found looks like a great option.

Based on budgeting, section 8 seems like a viable option without any major cons.

For the rehab loan, I would look at options longer than a 12-month loan.