Purchasing 2nd house

[Mindy Pearmon]

Good Afternoon Everyone!

I have a question or 10, please bare with me.   I live in Baltimore and purchased my house in 2007 when the market was up.  I am currently about 20k underwater.   My solution is this...purchase a 2nd house that is larger (which we desperately need), under my hubby's name only.   That way he is considered a 1st time home owner.  Purchase a foreclosure and rehab for under 130k with a 203k loan and then rent out our current home.     The plan is to move in 5 years.  Make sure that the 2nd house we buy has a resale value of 180k or more.  That way when we sell both houses we can pay off the new loan and fill in the 20k from the original house.  Does this make sense???   

I'm freaking out that we will be 260k in debt in mortgage loans!   But I also know that we won't have the money to pay to fill in the gap when we go to sell in 5 yrs.   I order to break even in the current house we would need to put in about 20-25k worth of work (re-wire and forced HVAC).

Please help not sure what to do!!!