I'd personally sell the townhouse (doesn't sound like it cashflows or would make a good rental property) - you may have no capital gains if you have lived in it the past 2 out of 5 years - I believe the first 250k for single filers is exempt from taxes and the first 500k for married couples.

I personally again in my opinion only.. but these guys could be fake lenders.. for sure HML  do not have a requirement that they can only lend to a corp..

There's no clear-cut answer IMO, it's a personal decision.  

Instead of debates and personal opinion, look for proof https://www.ladbs.org/docs/default-source/forms/plan-check-2017/single-family-dwelling-duplex-plan-review-list.pdf under G (Interior Env) which defines the minimum requirement of a habitable room (aka bedroom or bathroom).

AND prices have come down a bit in the last few years.Get a good grip on your personal spending and CUT BACK on everything for a couple of years.

I second this, I use rentredi for my personal properties and it makes life super easy.  

I have never seen the homes in person, but got a good walk through from my realtor.

I'm also in a 5 person group within gobundance called a 'gopod' and we meet weekly.

In my personal experiences a lot of structural items start with bad drainage.

One thing to note when getting conventional mortgages and spouses.There is a 10 limit per person for conventional financing.You can either do 10 conventional in each person's name which would be 20 mortgages for 2 people or if you do the mortgages jointly, will only allow 10 in total.My thoughts are not to own joint assets until you are both married.