There are multiple items at "play" so I may need to provide more detail to fully resolve the issue.Quick Background:Bought a rental property in March 2010 with financed alongside two friends/partners.

The CE Shop is also good, plus they offer a lot of continuing ed courses.

But, if that is supplementing regular income sources then that can be used to continue to expand the portfolio.That would be the short term goal.

It might not even go down at all depending on how the market treats it, but continue the purchase renegotiate now while you can and take the chances.

@Madeline jI would continue to maximize your 403b contributions but keep in-mind that you generally won't be able to transfer those funds to an IRA until you either stop working for that employer or reach age 59 1/2. 

Just to play Devil's Advocate, are you confident in vacancy being that low?

I'm fairly confident the current owner wouldn't want it to happen, because let's face it, he'd like to pocket the 12k and sell it for 50 again.Is there any kind of a play that will let me pay the remaining $38k and give my friend a few thousand so he's not completely out all his cash?

@Kim Meredith Hampton that was my gut feeling, I just didn't want to run in to any legal issues if his claim did happen to be true but couldn't produce paperwork and I continued with the lease I have.  

I have been trying to get my real estate investing started and I just seem to continue to sputter. 

There is of course regionalism to mortgage rates, and your personal situation plays a large role in it...but the difference in the jumbo loan rate and the conforming rate is only 1/8th of a point difference in my area right now.