Posted by GMann on June 20, 2006 at 10:25:36:
I am going to be blunt so sorry in advance.
I don’t think you should buy another house if you are in a poor cash position. Even if a lender can do the deal you have detailed, it has a high probability of failure on your part. If the renter doesn’t their rent you are in a real financial bind. If the property needs work (water heater, A/C goes out, etc…) you have a true financial disaster on your hands.
Fix your house and have 6 months expenses in cash reserves and THEN you will be able to move forward.
Best of luck!