To provide a realistic comparison, I made the following assumption for both properties. 20% down4.5% rate30 year term3% closing cost8% property management0% state income tax.

If this is true ( forgive my assumption), is there any advantage going through the extra paper work?

You gotta get educated my friend, assume everyone is looking for how they can rip you off if you're going to assume anything, that's the only safe assumption to hold.  

When a person rents a lower unit, there is an assumption that there will be noise coming from the upper apartment.

Essentially the 700k premium on the price is turnkey solution of corporate  presumably stable tenants (assumption).It’s a private national dental group with many locations and has 5yx3 renewals after .

You should look for conservative assumptions in the underwriting model, especially because of the long trend of declining cap rates / rising prices.3) The Financing - is there financing in place for the duration of the business plan, are there penalties for refinancing (this is one exit strategy), are the projected rates realistic?

But unless the property is brand-new or went through a top-to-bottom rehab in the very recent past, the assumptions of 5% for vacancy and repairs are simply too optimistic. 

I'm not sure why anyone would do either of those...and that's why I'm working under the assumption that your DTI should be view A LOT differently. 

If the lender continues to underwrite the loan with the incorrect assumption, that is on them, not you as you disclosed your plan regarding daycare costs. 

If it is an assumption or an entity purchase the entity will usually remain in the state of the property.