Help With Duplex Financing

[Shalane Latiker]

I currently pay rent for living on one side of a duplex and the owners are looking to sell their property to me in the next 3-4 months.  The property is only 10 years old, appraised at $150k, and they would be willing to sell it to me for $119k.  Since I recently had some expensive credit card and medical bills, my cash reserves are extremely limited, but I would very much like to make this deal happen.

I own two other rental properties and both currently have tenants. One of the properties is owned free and clear. Someone suggested that I could perhaps cash the equity out of the free and clear rental I have and use that towards the purchase of this deal. I would like to continue living in one side of the property after I have purchased it, and I'm aware that some RE investment lenders don't lend for owner occupied deals. It has also been suggested that I use HUD financing since I would only need 3.5% down payment and the seller could assist with closing costs.

What are some possible options that I have to make this duplex deal happen with limited cash reserves?