This time of year is periodically slower but you also have a lot of rentals coming on the market this time of year and new product being introduced to the marketplace

Maybe you can find a seller willing to hold the financing for a period of time, but they are going to want you to have skin in the game, probably a min of 10%.  

You simply need to find out why it is not selling, decide if you can work with the issues and offer a price that works.99% of properties that do not sell in a reasonable time period are overpriced.

Are you past the inspection period?

For example, I tell people that I will only buy property at 50% LTV period, end of story.

.- I understand that you have to live in the property for 2 out of a five year period.* Does this mean I would have to hold the property for at least five years?

I've gotten several banks to initially okay HELOC offerings at 70% of loan to value, however, I don't think HELOCs are the right vehicle for me for several reasons. 1) The rate is variable. 2) The term is normally shorter than a refi, 3) There may be an unexpected balloon payment if you're not watching the draw period closely.

Multiple mortgage inquiries in a short period have the same impact as one.

But if you look at cash on cash over a holding period where the rents increase 6% annually while most other costs are capped then you will see a better return in CA.About the only thing the Midwest has over CA is the low entry cost. 

The best way to avoid any future ugliness is to make sure up front that all parties (including seller and tenants) are crystal clear on the terms:Due Diligence Period (DDP) - I'm sure your contract specifies a period during which you can assess the home and then decide whether you wish to move forward.