If you end up with a $3700 rent payment, that doesn't actually improve your situation much.Refi your current home and drop another $100k on the balance to lower your payments and DTI.If you get a commercial loan, the lender will be more interested in the property performance (specifically, DSCR) than your personal DTI.Depending on the deal, offer a larger down payment, then look to open a LOC to access that additional equity, if needed.A partner could definitely make things easier in a case like this.

Typically, they lend on properties that need improvement and will then be either sold or refinanced within 1 year.

The type of investing he supports in long term investing to secure your retirement...NOT to improve your current wealth.

I did use it for a rental for a while, as the market improved.

Eventually through all the improvements the all in budget was 240k, which was still great.

Here's what he's referencing is my guess: In the TCJA lease hold improvement property was incorrectly written in as 39 year...when really it's 15. 

Are you providing a Tenant Improvement (TI) allowance to the tenant?  

@Darrell Wallace, this article in Accounting Today references "Correcting an error in the Tax Cuts and Jobs Act that prevented qualified improvement property from qualifying for 100 percent bonus depreciation."

Now I'm reviewing to improve my system to determine if and when an appraisal is appropriate. 

For commercial properties, I advice my clients to focus on the business plan and yield (IRR) as Cap Rate is only a point in time measure and may not tell you the potential for improving the value.