If the property cash flows well enough to cover the lenders debt service coverage ratio, and you have adequate liquidity, you should be able to qualify.

Currently I have a FICO over 800 plus 40k in liquid capital.My question is...

A neighbor told me that she had been raising manx cats, and both houses reeked of cat spray and urine.

Then saving the extra money for an emergency fund as well as your next down payment is much more important.Also when you go to get the second mortgage the bank is going to care more about you having reserves (more cash or assets that you can easily make liquid) than seeing you have paid down you mortgage some.  

I have thought of spray foam which creates its own vapor barrier but it is way too big of a job for the standard DIY kits. 

EARLY LEASE TERMINATION FEE (LIQUIDATED DAMAGES).

Account Closed  someone loses there job and you want to sue them .. give me an   a swear word break.. although in practice most board of realtors contracts state that the liquidated damages are limited to the deposit that was put up.. 

I spent approx $7k getting the unit ready new floors, appliances, vanity, sprayed the shower/tub, etc...it looked great.

There is profit margin to be made if the project is completed but for various reasons, I need to liquidate my capital and can no longer complete the project.

It could be that they are preserving their liquid capital for their own deals and I get that but what is the reason for the self-directed (solo) or QRP funds being with held?