Help me figure out a way to reduce my debt to income

[Jason Dale]

Hello BP! I have a problem I can't figure out. I need about $12k to reduce my debt to income ratio. 

I have a condo for my first rental property and a unit 2 doors down just went on the market as a foreclosure for $85k. I bought mine in 2012, also foreclosure, for $125k. I talked to my bank and they are willing to finance it except I have too high of a debt to income ratio. I have $15k for downpayment/closing costs and I can use my 401k as reserves. My current unit rents for $1500/month. This unit will cashflow about $500 a month. I have $12k left on a loan for a separate side business I run and paying that off would get me to the correct debt to income I would need. Buying the unit at this price I would instantly have at least 20-40k equity. My current condo was a first time home buyer deal so I technically have 2 mortgages on it, so I can't really access the equity (refi would have significantly higher interest rates). 

I only have one family member who has enough money to loan out this kind of money, and he already said no. 

I have reached out to several other lenders I've found advertised here and they all want either way more up front (one wanted $40k!) or the price, after down payment, was just too low for them to finance. 

So I'm a bit stuck. I could use all my savings and wipe out a lot of my debt, but then I have $0 fallback or downpayment money. I also live paycheck to paycheck with extremely tight margins so "saving more" is not an option. 

Any ideas?

Also, the condo needs all the appliances. I figured an equity loan after closing would be able to pay for that stuff. Minimal reno needed. 

Thanks!

Jason