Income/DTI issues?

Hire them hourly and put them under your wing... this is basically like the interview process... you groom the individual slowly giving them more and more responsibility over the next 2-5 years until they can run the job site on their own with minimal input from  you and can clearly communicate any issues that may arise.

Below is the math (all in % of house value):Rent: 12.0%Taxes: -2.8%Average Long-Term Maintenance & Repairs: -1.7%House Insurance & HOA: -1.6%Average Vacancy/FinderFees/Tenant Issues: -1.0%Property Management: -0.8%Total Average Annual Return: 4.1%I have heard landlords making 10% (no leverage) and 20-30% (with leverage). 

Now maybe that's not as big an issue if you're a buy and hold guy, but it's something to keep in mind.  

With an SFR, I don't have to worry about that issue.

What exactly is the lending issue .

They are fairly common once you have built up enough equity.One tax issue that you may want to be aware of (if the commercial property is in an entity like an LLC) is the debt-financed distribution rules. 

@Wei WangYou may want to consider the land trust trick described here, but make sure to consult a local attorney.Also, there's this BP blog post discussing the LLC issue and this old discussion thread.

Plus, cheap properties like that are almost always in an area with no appreciation potential and plenty of tenant issues. 

If the house is not that old your contractor is probably correct on fixing the issue.