Only thing I can think of is the bank will see ur take home income lower so they wont give u a higher loan.

I know that anything on MLS this wont be an issue but im talking about other outlets; Pre-foreclosures, bankruptcies,  REO, ect… 

First tenant destroyed the carpet.

The other things can save you if things don't go well, but a property manager can destroy the investment - especially when it is supposed to be passive...

When it comes time to refi the second house in order to get my cash back, wont it be more difficult to get a refi being that my debt to income (with a modest day job) ratio is now changing each time I try to acquire a property?

And or my personal opinion for the FWIW file.I wont go into the tulles on this..

Also the REAL work begins when the letter goes out, you can have the perfect letter and if your bad at sales you wont get contracts or close deals.The letter itself don't matter as long your consistent you'll be fine, I didn't need to market as much because I took it seriously and generated sales with the leads I got within those 4 months, one more thing it WILL take time the returns on a direct mail campaign is like a 3% return rate sooooo send those letters!

The paneling has been completely destroyed by the tenant. 

I have to move into the property so it wont cash flow the first year, but running the numbers it should cash flow $420 a month with the rent that it gets right now, when I move out.

I am currently in an EMD dispute and I wont get into the specifics, but one thing I am not sure about is if the seller is allowed to get the property under contract with a new buyer before my EMD has been released.