The only way real estate investing seems to make sense in my mind now is to use as little debt as possible and then hope in a couple years that rates are down and then you can refinance to get your equity back for additional properties.

Our combined annual income is $150k, with somewhat limited potential for salary growth.

All said and done it cost me an additional $2300 in fees for the HML that went past its maturity date plus the appraisal, all this could have been avoided if they told me they had an issue with my credit score from the beginning. 

Personally I would rather have the $260k now and invest it and get 8-9% than $100k now and get 6.75% over the next 30 years which is taxed as ordinary income...

Some things that might be a concern:1) Obviously have to make sure things are all permitted first2) I don't want the room to "feel" like an addition, so flooring has to be same level/standardized with the rest of the house3) Unlike the rest of the house that has an identically-shaped 2200sqft basement underneath, this added space will not have a basement directly underneath it -- I'm not sure if this poses major cons for some reason that I'm not aware of4) Especially given the lack of basement underneath, I have to make sure that the HVAC can still somehow be piped into this room#2 and #3 are probably my biggest concerns (#1 and #4 I can find out relatively easily)Any tips/thoughts or other experience would be greatly appreciated. 

Let me know if you have any additional questions!

Acquiring an income earning property with high potential for appreciation for less than $20k out of pocket?  

Buyer's have to have at least 620 credit score and income below either 126K or 95K.

Let me try to give additional information. 

The property may be "great value" but that's because of the lack of approved additions.