Was the business credit enough to put towards a deal? 

Credit Score: 

If you have equity and decent credit, a conventional Fannie Mae HomeStyle (or the Freddie Mac version) would likely be the better option instead of an FHA 203k loan (which will require a 3rd party HUD consultant to oversee the deal in addition to having the contractor involved). 

While I do maintain a relatively modest percentage of my assets in money market instruments, corporate debt funds, and high dividend stocks, I remain most comfortable with the investments I specialize in and know best.  

Most people think real estate investing requires huge capital, perfect credit, or bank loans—but that’s not always true.

We own 3 other rental properties that have a 6.5%-7.5% APR, and no credit card debt or any other high interest debt to pay off.

Quote from @Argel Algura: Hey Bigger Pockets Community,A year ago I wrote about rebuilding and starting over in life and considering real estate investing as a path (see post here: "Bad credit, minimal cash and starting over in life . . .

You are right, when the inspector mentioned the possibility or prior water damage is when you should of had that basement inspected by a contractor/professional and not listen to your agent.Gregg is right, the sellers were aware of some of the damage which is why they gave you a 5K credit. 

You might find a local credit union or community bank that will go to 95 -100%.At one point I called 2 different VA Regional Loan Centers regarding this section in the VA lenders handbook:Assumability - The second mortgage should not restrict theVeteran’s ability to sell the property any more thanthe VA first mortgage.

I am simply trying to offer a solution that is fair to both parties that allows the property to stay in the family.The biggest problem is they are having trouble refinancing the property due to credit balances.