It is an older home, and would be hard to move walls around to make space without basically taking the whole house apart.

Plus, the mortgage rate is still high and I am not kin to pay the high interest either. 

In the Phoenix market houses under 300,000 are selling fast so the BRRR strategy as an exit won't really apply unless you love the place as a rental rather than selling it.

Too much risk and variables for me.

It seems like loan products for investors have higher interest, so any advice on how get the best rates, ie which banks/lenders?

I can't speak for all investors, but I know I have become more conservative with the rising cost of construction, interest rates, insurance costs, and vacancy hold outs. 

Just toured the house today and it was in better condition than I expected.

You will also have more cash on hand to complete rehab projects in fewer draws should it be a rehab loan.When using a higher downpayment you'll be keeping higher equity in the property and can often get a lower rate with lower LTV (particularly with DSCR loans).

I am closing on a multi-family (3-4 units) buy & hold investment in East Boston.
Purchase price: $969,000Down Payment/ Closing Costs: $113,000I am in the process of buying my first property, using a 2 for 1 buydo...

Cash flow is $720, and Cap Rate is 6.2%, and the home value is still growing.