How to finance this deal

[Jay Thomas]

I am in the process of buying a rental property (condo) in a very nice location. I did my calculations and the numbers look good. Best case scenario I can get a 25% cash on cash return and 5% in worst scenario. The condo is on a short sale, that why I am able to get it below market value. Asking price is $85k

The downside to this deal is that the HOA doesnt have enough money in reserve and my bank is telling me that they need to have atleast 10% in reserve before they can finance the deal. Should I move on and keep looking or is there anyway around to get financing for this deal? I can do cash if they will accept $40k cash offer but I think that would be an insultingly low offer. What do you think?