It probably is still worth it if you can raise rents, reposition the property, improve the efficiencies of the property and optimize debt when the time is right. 

Since you’re assuming this debt as part of the purchase, understanding the exact amount is critical.

Suggesting to them buying their house for a wholesale range offer or lower dependent on the extent of the rehab, then having a contract in place that gives them a percentage of the profit to help get them back on their feet, paying off debts etc.

What if you're a cardiologist with no debt and making $250,000 annually?

In my experience, these are also referred to as "QM" and "Non-QM" loans ("QM" = Qualifying Mortgage)And as consumer mortgages, these loans are generally issued under the person's name with the underwriting based primarily on the borrower's DTI (Debt to Income) ratio.

Eliminate debt, establish a budget, and save.

Virtually anyone lending HM in 07 to 09 had a lot of bad debt.

(This option would would not carry any debt, all debt would be paid in cash)Or keep our current house, rent it out, and cash flow NET monthly about $1,500?

I am expecting to do 3-4 deals per year until I get to 20 properties or so and then snowball the debt so they are all paid off by retirement. 

Another option I’d recommend considering is leveraging business funding, which can give you the flexibility to scale and take on multiple deals at once without depleting your personal savings or credit.For example, you could access $100K to $150K in 0% interest business credit—this doesn’t report to your personal credit, so it keeps your debt-to-income ratio low.