As long as your payment history has no blemishes, your rate will move towards 800 as 1) the "age" of your credit accounts increase and 2) the inquires fall off. 

Account ClosedYou didn't say whether or not you have it listed with a Realtor or not. 

I started with Cozy and loved them- hated the delay.I now use Zelle and all my rents are in my account, on or before the 1st.I still use Cozy for a lot of other features- Listing, background, record...

I have complicated schedules, with accounts for RRSP contributions, stock cash trading accounts, a rental income property (including expenses for flights to buy said property, etc.)  

Unless your friend is an accountant, you should ignore his advice on taxes.While well-intentioned, he took something that possibly does help HIS business into yours - where it does NOT apply.

After taking into account property taxes, utilities, water, insurance, and a 10% repairs & capEx fund, I figure he's making ~$5,000/month. 

You will survive. good underwriter looking at your tax returns will see you own the debt and the asset.. probably gets bounced.. this is what HML did pre 08 all of our loans went to buy and hold folks and we did rate and term refi.. but we were a true third party lender .. its was a great gig while it lasted my average turn on my loans was 92 days.. and the buyers not only had no money in the deal they got refi proceeds usually 5 to 8k a house and they would do 4 and a time.. now they were suppose to take the refi proceeds and put them in their reserve account.. but alas the reserve account ended up having Jets skis in them instead maybe a new car.. or that trip they wanted to take.. etc etc.. anything but where it was suppose to go.. 

Obviously this is extremely difficult, but automation is quickly gaining traction so i try to account for that.

That is why you have to trace the interest on where it is used.3) If you have another trade or business and deposit the money in the business account, there is an exception on not having to trace the interest if you have used the proceeds within 30 days.

When I have previously checked into this with my accountant it seems their are very specific tests to pass to be considered a materially participating passive investor, namely that you must spend half of your time and at least 750 documented hours in passive real estate to qualify to deduct depreciation.