Their explanation had to do with the front porch settling and causing water to get into the basement.

Perhaps this would make the lender more comfortable while giving you the benefit of settling with a shovel ready lot. 

I agree with John about settling on a property and running the numbers.However, if it were me once the market and property were identified I would form an LLC with an operating agreement that states what each members contribution and responsibilities are. 

It's good to talk to a lot of lenders out there before settling.1.

During the coaching sessions, you'll cover a ton of training material, and discussions with someone that can really dig into what you've been doing, what you're trying to do now, and then collaborate you're doing now, help you settle on your goals & where you want to get, and then customize a plan for you to implement.   

There's no need to settle for anything less than the perfect opportunity.

We eventually settled on 278K with no inspection contingency.

Rest, let the dust settle, and put the cash flow into savings. 

I'm settled in now and my rental property is listed through a property management company. :-)

We are shooting for 3x income, but might settle for as low as 2x, if the person seems like a good candidate.