When initially purchased, the property was in disrepair and had not been properly managed for 10+ years.

Take ownership of your mistake and learn to do the proper due diligence recommended above😊

There really isn't enough information here for someone to give you a proper answer.What you need to do is calculate those tax savings over the next 5-7 years (or however long you plan to stay in the house) vs. what the interest rate reduction will save you over that time period.

How do I properly analyze this property?

.$10k STR rent on $1.3m property at 80% LTV  will be negative cash flow when properly allocating for all the expenses.  

You are correct the proper word I am looking for is ownership.

Your attorney will review the contract, help with due diligence, and ensure that the closing process is handled properly.

Also, there's the added risk of being compliant with federal regulations & state laws as well as properly assessing/vetting both the borrower and the property.

Waco is a great rental market because there are so many blue collar jobs that provide consistent demand for housing (I have heard that 80% of homes in Waco-proper are non owner occupied) but there is a lack of white collar jobs that would keep Baylor graduates here or bring working professionals from Austin/Dallas. 

If the score is too low, does anyone have the proper wording to tell the applicant that we can proceed further due to this?