Luckily, great price plus great timing meant I made profit, but since then I have steered clear of Hemet  except for flix/flip.  

you should get about 7 replys from Memphis TK operators shortlyto start with here are a fewAlex Craig@James Wachob@Curt Davis@Chris ClothierThese southern gentlemen  should be able to help steer you into the better areas to invest in.do not get talked into sketchy areas this will not be good long term.

Incidentally, this is why you often want to steer your appraisers towards the "right" property.

@Richard Forton, Let me add to what @Chris Martin, and @Ronda R. already started steering you towards - a 1031 exchange to sell both and get into one larger asset.  

They'll be able to steer you through the process.My question would be are you paying cash?

I have my brother to thank for steering me in the direction of this community, and am grateful for it with so many tools and valuable inputs available.My wife and I are real estate neophytes, but are looking forward to the opportunity to gain experience and grow a venture with our family.  

Then I come up with more specific questions and go back to my original guys that steered me to those markets and pick there brains some more.

I'd steer clear of bothering with this sort of ridiculousness going on.  

As @Sean Cole mentioned, if you absolutely must accepted a financed offer, I would steer clear of Fannie Mae and go with a local bank that has some flexibility to make their own rules.

Definitely steer clear of any lender who requires that large of an up-front fee.