This allowance does have a phase out related to your income, so it would vary depending on you and your wife's specific circumstance.

I thought at this point in time it might make more sense to start investing in RE projects that can offer above average returns ( 10+% p.a.) with relatively low LTV's and first lien positions. 

I'm a bit unclear on the math of what cost property, relative to my w-2 makes sense in terms of offsetting my income. 

@Dwayne Clarke going to take an educated guess that what you were cautioned about is buying someone else's problem.Over the last couple of years, many OOS investors bought a bunch of SFR and MFR properties with LITTLE due diligence.Many were sold Class C & D properties that they thought, or expected to perform like, were Class A or B.Once they figured out what the properties really were - via tenant nonperformance and never-ending maintenance issues, they looked to sell them.If you know what you are doing, their loss can be your gain.If you are new and do NOT know what you are doing, then you'll just be the next "sucker" that gets taken.

They have picked the best companies to integrate with and we haven't had any issues! 

Also, a 3-month try before you lease may be the issue, tenants are using it as an MTR, it gives them far too much wiggle room, and that short-term turnover can start hitting you in the pockets pretty hard...With that said some incentives you can offer are the first and last months rent-free for a 12-month lease.

I recall asking previously and they refused to provide it because of privacy issues.

Price, Condition, and Exposure it sounds like you have already done a reasonable amount on the exposure front so the main issues lies with either price and/or condition.

My biggest issue is that my credit most recently took a hit, dropped 100 points from 740-640.

I would ideally not house hack this property and maybe leave all the tenants in place but what unforeseen issues can possibly come up.?