This is a pier and beam house that's going to need leveling, drywall work and the bathroom needs some help too.

The only part I am not sure about if the market will "correct"; I believe it is much more likely that it will level off.The reason I believe that is affordability - the NAR publishes an affordability index; basically how much of a median household incoem is needed to buy a median home with 10% down.

The ground floor level of the building has two restaurants.

It's entertaining to me that people compare things at the state level. 

@Ryan PhelpsI think there’s a level of detail that you’re overlooking that would help clarify your thoughts on #2.

I was wondering whether I can qualify for financing with this level of income?

It is still the #1 best, cheapest, most effective strategy to simply negotiate and work with the tenants on a human level.

We don’t make a lot of money, my wife is still in school to become a nurse so she works part time, and I work at an entry level position at a hospital.

The space contains a short common hallway on the first floor, and continues to the 2nd level staircase (top unit entry door is at the top of stairs).

You will need to show income of at least 2x what your mortgage payment will be, and in that whole process treat it as if it will be your new primary residence (in order to benefit from that sweet LTV level).