But said they were doing me a favor by not valuing property at the original purchase price... which they should have due to not owning the property for more than a year..anyone else have issues with what they call "mortgage seasoning"?

They would do better with you defaulting than if you performed so, you can bet the numbers are going to work in their favor and have very tight covenants to ensure if you do default, they benefit from it.

That being said, it is a commercial lease that is very favorable to the landlord.

I would be able to get a more favorable interest rate that way with no money down and I can use it to pay for renovations.

I have heard every argument in favor of spouses having separate individual accounts, and most of them are bunk. 

If you find a property that takes FHA, but is distressed, you do have an option with the FHA 203k loan that you can use to purchase and fix it up, this does require using certified contractors pre-approved by the lending bank (generally more expensive than contracting out yourself or DIY).If you do happen to find a deal and negotiate it to take FHA with 203k repairs, the numbers may still be able to work in your favor.

In the past few years, when inventory has been incredibly tight, this has tipped the scales in favor of flippers and sellers.

The advertising/staging is not doing you any favors.

If near term cash flow is the goal, it won't be met in this scenario.You might occasionally be able to structure something more favorable than a mortgage as far as interest rate or repayment schedule, but I believe that will rarely be the case. 

I am not a CPA or attorney but I would suspect that since you did not buy it, two year ago, even though it is your residence you did not own it and therefore it you buy it and then sell it, you would not get the favorable tax treatment.