Lenders we’ve dealt with in the past made our rentals only as valuable as the equity and disregarded rental income...that would be a little extra frustrating with the mixed use land contract purchase.

I’d rather just pay the extra if I’m going to draw scrutiny. 

Considering the work required is only $15,000.00, I would negotiate with the seller for them to get the work done and pay them the extra $15,000.00.

The idea is the little amount extra they pay in taxes doesn’t compare to how much more the property is worth when valuing the cap rate& purchase price.now the same can be said of income....overstate the income to make it look more profitable and pay a little more in taxes but make much more on the sale.it’s shady but it can EASILY happen so just wanted to throw this out there since I always see everyone “default “to verifying everything through a tax return.me personally...I have audited many businesses and when I am going to purchase a property that is just what I am going to do.First and foremost I want bank statements to verify everything.  

Typically folks in the 3.5% down bucket can't afford an extra 1.75% paid out of pocket, so it's rolled into the loan balance as a standard (but technically optional) thing.

Having the extra $150/mo without PMI is massive  Your rate isn’t bad, and though you didn’t list the interest paid last year, it will be less this year and the decreased interest will accelerate as you go through the loan term. 

Not sure where you got your comp data, but the only thing closing over $1M in that neighborhood is 1,000 sq ft larger with one or 2 extra bedrooms.

I would typically advise to find a local bank that is convenient as my guess would be most rates will be comparable to point it may not be worth extra hassle. 

Same as you can't convert a coin operated to a regular type without major work (yes, I looked into converting some extra units I have).For washers, go with top loading units, they are more reliable.Consumer Front loaders are cool, eco friendly, use less water, and electricity, and more expensive, but, they break down more.

All that extra land is locked up in indivisible parcels - during a sale, the market assigns no (or, negligible) incremental value to the backyard land.