HVAC contractor sees the age of the unit and jumps right to "you need new" approach.  

I wanted some advice on that and maybe a different approach I could take for my first property without putting much of my own money in. 

A neighbor approached me and asked to rent one spot.

If yes, and you haven't been enforcing it, I recommend taking the good ol' Brandon Turner approach. 

I have been approached with buying a condo in an up and coming area close to Dallas, TX.

Granted, as I approach the $1M budget, I'll be most likely looking at a commercial situation (5+ doors), at which point my personal income may not matter.

While this might work out for you, I would consider it the more extreme and risky approach. 

If you chose to reinvest that money you should be able to make it make much more than $800/month.An alternative approach if you strongly believe that future value will be much higher would be to harvest the equity and keep the property, but the new mortgage would essentially destroy your cash flow. 

Our numbers look very good for the property, but we’re at a loss on how to approach it financially.

I think it's a better approach.