The overall vacancy rate is not atrocious, 11% which tells you they rent fast for right price.You are in a low income area, median household is barely $36k/yr. 98% of the local residents didn't go to College, so you get an idea of the wages. 

A friend rent’s her 2BR unit in the same complex for somewhere right around $1400 which includes heat and hot water.

You could safely say that you only have 18 Christmas's with your kids before you "legally" can no longer make them wear matching pjs and sip hot cocoa in front of the tree.

Could probable get $3600 when the lease expires in July.Real estate agent thinks I could get $615 for it now as the market is hot for 3 bedroom condos in my town.While the condo as appreciated quite a bit in just a year, it's not a great return for the amount I had to put down. 

Notice the upper storage doors above the closet, another unique thing about this house.This house is considered "hot" by redfin and since it is a good suburb of Denver, it will sell fast.  

Nothing but hot air. 

My wife and I are fortunate enough to earn enough from our 9-5's to make well above the local median household income, but are not in a position to start purchasing property for cash.

New roof, new hot water heater, etc.

The house is about 8,000 sq ft on a river with a pool, hot tub and boat dock.

Banks will be looking at your DTI as a household, so those debts of your wife's may be part of the issue- you don't mention if that's a very large number, but those car payments can really add up.You are in a good position in terms of having plenty of equity, but as I have learned from personal experience, equity and $4 will get you a cup of coffee at Starbucks, lol.