You can't just make a blanket statement and say LTR's are safer in every market, and STR's will generate more revenue that a LTR in every market, etc..   

If it is such a great deal, and owner financing is not an option, your best bet is to bring in an investor to cover the down payment and reserves.

Looks like there's some good possibility of a little above-average appreciation there like you said, but I probably wouldn't bet on that. 

Scottsdale and surrounding areas seem like my best bet but i'm uncertain about how strict those areas are on STRs.

Anything else I am willing to bet someone that makes money from selling lists or providing DMM services is behind it all whispering in your ear that DMM is OK!

**I'd push hard on the first option: I'd bet my annual income that if you met with 3-4 commercial lenders that you would find one that meets your needs.

But a safer credit score depending on the property would be 650 or higher.

Do this a commercial loan and I'd bet you find a bank within your first few calls.

Talking to a more local lender that can do that would be the best bet though since it is not a standard loan product, I believe. 

Zillow shows previous listings for rent at $825 and $1050, so my numbers may be slightly off, but I want to be on the safer side.The property has separate utilities for heat, electric and gas, so tenants would be paying their own bills for utilities.