So he needs to be more ITM than  the 1.25:1 ratio.With that said, to answer the question-- figure out your debt or income.

I would not close on the home if the extra income property was not valid.

I would like to start generating some passive-income and start with some residential properties in my initial portfolio.   

It seems that investing in improvements while I still live in the home wouldn't be tax deductible.

Based upon my research findings I might also start thinking hard about that heater.So, the seller can come after me for the loss of income as a damage since we both agreed that the tenants would vacate at the time of closing even though there is no closing now since my financing fell through. 

Applicants have a prior eviction years due to unfortunate circumstance but good household income and noted they are in a better place financially.

You will want to insure a number of things as an MTR landlord: your interest in the building itself (owner's policy), your contents (owner's policy), your interests if a renter or guest is hurt on-site (landlord policy), and possibly flood, wind, lost-income policies.

It's about having an income that will enable you to maintain your current standard of living for life.

The income isn't covering the costs (maintenance, capex) and you've only gained 15% appreciation in the three strongest years we've seen in a long time.

I tend to agree that selling seems like a good option, especially since your rental income will not give you a good yield on current property valuation.Did you live in the rental as primary before?