This leaves a lot of money on the table and causes great frustration for landlords.

For $10/mo I think that is a pretty good deal and convenient for people (especially during NFL season), no matter the size and level of luxury of your unit. 

We are in the hard money lending business for commercial properties - with loan sizes from $500k to $5 million.  

Now to help with affordability, zoning allows for up to 5 unrelated adults in a unit, but again, as long as reasonable occupancy standards are met for the size of the unit. 

My target purchase price is no more than $410K, aiming for an ARV in the $530K to $570K range.I'm comfortable with small to medium-sized renovations that don't require major structural changes or additional square footage.

Has anyone ever tried to increase the size of a PEMB?

I have an investment property with a small front yard and average sized backyard. 

For me, it's the "One size fits most" part that made me spill my coffee.

You could find a lender that can go up to 80% LTV, thus even if there is this amount of closing costs, you still are ending up not bringing any money to the table, and essentially financing the fees. 

I feel like I need to have something to bring to table to also help mentor.