Also keep in mind commercial loans readjust. 

Keep in mind, such an appraisal may not be able to be used by your lender, but perhaps you can request an appraiser with investment property experience (wherever they may be). 

I’ll be sure to keep looking into everything you mentioned.

While I love the idea of eventually owning a paid-off primary residence, I’m debating whether it’s smarter to sell our current house and use the equity as a down payment on the new home or to keep it as a rental.

You'd ultimately break even just to keep the lights on. 

We work hard to keep things positive and real estate-focused (no politics or religion).

If I do it with a syndication I will have no debt; the investors will get a 6% ROI and I'll keep the rest ($300k per year).  

However your potential margins - with a brrrr/refi or a sale - are very large if the property is able to indeed be repaired.Good luck and keep us posted on your progress!

So a loss of about 55k We did a lease to own option so I could immediately take over expenses but keep their primary resident loan and interest rate.We agreed to a deal which would cover all their expenses at closing, their remaining loan balance, and $45,000.

If you are just carrying it, why keep it if you know you made a bad deal?