Should I just get a second home and rent whichever of my two homes will be more profitable until I save up enough money for a 3rd home?

Get pre-qualified for which ever option you go for (Conventional loan or Refinance loan).  

Google voice is free and will ring to your cell phone

My advice is: Whichever route you take.

Whichever that would allow me to use very little money out-of-pocket.

If they are not permitted and zoning will permit them they will have to pass a full codes inspection, which ever housing rules the local city uses.

Look into HomeStyle renovation loans from FNMA. 80-85% LTV (ARV or purchase + cost of rehab, whichever is smaller) for 1-unit investment properties.

WHICHEVER of your tenants gives you the most pushback on this, needs to be the tenant that you select to be given the 30 day notice.  

Jonathan, which ever way you choose you so long as you keep in mind and think through your angles and have multiple out's feel confident in that.

The property will be rented to Applicant on a ONE YEAR LEASE basis at a rent of $995.00 per month, if Applicant signs Owner's written One Year Lease and pays Owner the first month's rent ($995.00) on or before MARCH 20, 2011, in which event the holding deposit will be applied to the Security Deposit.Owner and Applicant agree that if Applicant fails to sign the Lease Agreement and pay the first month’s rent ($995.00) on or before MARCH 20, 2011, Owner will retain this holding deposit to compensate Owner for the inconvenience.A PRORATED AMOUNT OF $385.20 FOR MARCH 20-31, 2011 WILL BE DUE APRIL 1, 2011 AND STAND AS APRIL’S RENT.