They get scared of the mortgage, maintenance, property taxes, etc. 

This tenant has been a pain in the *** and high maintenance from the get go, but we are stuck with them.  

I'm in the position to apply(depending on lender DTI requirement) for conventional financing through the builder at <6% interest rate in this current market.

The DSCR product is a non-QM loan and will not be sold on the secondary market to Freddie or Fannie, so there are lenders that may will not require a seasoning period. 

Assuming a required rate of return of 5% (comparable to high-yield savings or a CD), the deal would need to yield a total CoC return of 10% (since everything is split 50/50).I'm stuck because while playing around with numbers, achieving this return seems improbable if not unrealistic.

Perhaps talk to him and go over your requirements in more detail. 

I guess I’d like to learn more about investing in bigger commercial deals….. what are the requirements?

Get permits if required.  

You only need a place to track tenant information, payment history, maintenance, etc.

The $78k value per unit and total value of $780,000 are well over many lenders' minimum requirements.