Experienced investors have stopped borrowing money and are paying down their debts. 

I ask the bank for a loan but I'm afraid that do to my debt to income they might deny me the loan.

Then the property title would be transferred into the LLC, thus giving you checkbook control over this and any other assets you will purchase in it.Here are some of the Checkbook IRA benefits:Ability to execute transaction directly without going through custodian or IRA Administrator, simply by writing a checkEliminate transaction fees and asset based fees (you will need to pick the right custodian with proper fee structure, the company you will chose to do this for you will help you make that selection)Eliminate delays and 'red tape' that often comes with having a custodian handle every single transaction, you can act on best investment opportunities immediatelyHope this helps. 

This can cause you to have to sell the property if she has outstanding debt. 

I suggest you focus on your Step 1 so you'll get matched into a good residency program and then you can pay down your 400k debt :]

We both have excellent credit scores and zero debt, but not a huge downpayment.

The default amount, which is the amount needed to cure (Plus fees), leads to the judgment amount, which is typically the total debt, plus fees.

For starters I've started Clearing my debt which isn't much.

Asset type,size, debt structure,etc.? 

You could eliminate a couple of people by not being being available on the 1st but I wouldn't sweat it.Try and schedule  couple of open houses before the tenants move out if house shows well with their stuff.