You also have a property that is taking maximum advantage of leverage and the favorable rate environment.And, you've concentrated your cash so that if a next deal comes along you'll be able to do a refi on that new property to purchase another good investment.

My dilemma is made worse by the fact that there is nearly no inventory in this market with favorable short-term rental specs (no HOA, no land lease, no rental restrictions from the city, etc.), and this property fits them all. 

Does anyone have an recommendations or advice to secure favorable financing on something like this?

Because I am new im not sure whether it would be better to purchase a SFH in a good neighborhood or multi unit property in a less favorable area renting out the second unit? 

You can try lower offers, with less favorable terms to the seller (inspections, financing) and still get it, since no one else has wanted it yet.

Basing your appeal on your purchase price alone is unlikely to work out in your favor, all else being equal. 

I would love to see a post Covid  market  that slightly favors investors.     

My take away from this is, get more deals, tried to manage expectations also but don’t think that worked in my Favor.

@Anna ChanI would think keeping the residential would have more favorable terms vs the commercial, especially if you bought it as your primary residence.

Why would you seek a commercial loan on a property when you can get more favorable terms for a residential property?