I have cash, but I've learned (the hard way) to always have a cushion in my real estate bank account.It turns out that my debt to income ratio is too high because of the current mortgages I have.

I have a $25K cushion sitting in an account for emergencies, and save a few hundred a month from the rent for improvements. 

If it's truly worth 200k, you can make this work with a large cushion.  

In order to utilize DP service to help with down payment, you need a cushion of at least 20 to 40%.

If I do take on 1 bedrooms only, I usually look for a bigger cushion.

Get rid of it as quickly as possibly and, if at all possible, try to save a bit on the side to acculate money as a cushion (emergency fund + potential downpayment fund).

I have $15k to spend leaving me with $5k as a small cushion.

If you like the rest of the house, find out for sure what this hole is from, get estimates on the repair, add a cushion for the unforeseen, and use it to negotiate with the bank. 

I would recommend you have a 12 month reserve cushion for your first deal.Do your homework and take your time and you can make a lot of money in this business.Good Luck

We focus on A/B neighborhoods where rents will continue to be strong, we make sure to have a good cash on hand cushion in case of emergencies, we always keep 30% equity in a property and financed with a fixed rate and we always buy low.