Capital improvements down the road? 

The improvement is most likely going to be in the rate, which can go below 9%.  

What are my real potential areas for improvement?

If it's spending $500 repairing a bunch of stuff this year, it's probably going to be $500 repairing a bunch of stuff next year too, just different stuff (depending on the age and condition of your property, I guess), so I'm not sure why an underwriter would add regular, ongoing repairs back to the DTI calculation.However, if you're talking about items that used to require capitalization, that are now allowable as an expense under the new de minimus safe harbor regulations, then yeah - that's not really a repair, it's capital improvement that's permitted to be expensed, so I'd argue that line 19 is technically more appropriate.  

Has upside, which I like- can be managed much better and value improved with rehabbing. 

Over time, as you get exposed to more circumstances and situations your judgement should improve and you should rely less on the 'rules'.

My wife and I listed last week, the home is over-improved for the area, so we knew we may get a lot of activity.  

Property values increase when neighborhoods improve.

I'll make improvements over that time and hopefully sell it for a profit or a least break even.  

Lets add in the improvements.....Adding $10k per unit would be $30k and your return on investment for the improvements made will most likely be too low for it to make financial sense.