Right now circulation is very clogged and only a matter of time until a massive BK that will force the fed to lower rates.

Thanks for the advice, is also personally motivated so lowered the price as much as I could.

Most lenders are going to lend based on the lower of the purchase price or appraised value. 

My son currently lives in the townhouse b/c he is going to school and works in the area.Since he is young and starting out in life, I would like for him to only cover the basic costs (taxes, HOA, utilities) just enough for me to break even (I believe that will put him slightly little lower than market rent rates). 

Everywhere I turn all I see are pitches for affordable housing and the same (not so) compelling arguments regurgitated by syndicators, capital raisers, brokers etc. for the investment strategy....strong returns...lower volatility....supply (huh?)

When I inquired about the property it was already bid up over $100,000 asking price (still lower than sme other properties I saw - $140k/unit).  

Since the mortgage rates have been higher than previous years and the inventory has been lower I'd recommend looking into multi family options that are currently cash flowing in areas that values are increasing.

However, I made the decision when interest rate was lower and there was support for an appreciating real estate market.

But at a lower rate compared to other cities that are growing. 

It will give you a lower interest rate on both properties because you bought them as owner occupants, and it will require less down payment to get into.