I am certainly not sure about your objective therefore feeling like hitting the wall is obvious.

If it fits your business model and meets your objectives, then figure out your maximum price.

My objective here is to purchase the lot, keep renting out the house and garage and move in valuable inventory to the office space.

She'd likely object less if you rehabbed it as a rental, and lived in the nicest home you could afford elsewhere.There is a difference in buying an ugly house for an investment, vs. living in an ugly house because you're living beneath the standard of living your mom hoped for you.

If you are in rentals then the core objective always is cash flow. 13.6% cap rate is sort of high and usually is the case for a low C or D area.

You want to get it before it gets on the open market, driving up the price but, your objective is the opposite of the lenders.

To support this strategy we run 5-year projections on all our potential acquisitions to see if we can make our CCR objectives.    

If what we are seeing here is true, combining the millennials point with the quantity of SFRs and the supply/demand point, then it means the next boom will come when millennials will have kids, ( if they ever do... hahaha... they don't seem to be so excited about having kids).

Your coworker's goal and objectives should drive the decision.

You need to have a clearer idea of your objective.