Hello Laura, how about partnering up or joint venture with someone that has good credit and low to no debt .That may be an option to consider

I do not think it is a good idea to live debt free and pay off your house as so-called financial experts propose.

My agent said the bring in $2200/mth but have no other debt or payments.They are stressed about having to move (it would stress me out facing packing all that stuff up) and willing to pay more to be able to stay.I feel we just screen them like new tenants and if references check out I'm leaning towards continuing with them, although they are below the 3x rent income requirement.The property would probably need $3-5k in carpet and paint to ready for new renters so it would he great to have a good built in tenant for a while.Anyone have a situation like this go bad that can share some things to watch out for??

Debt to income to high... not enough money down... geographically to far away...

The loan would still be in the current owners name, which may affect his debt to earning ratio if he is trying to buy something else.

Debt-to-income ratio, credit score, 401K balance, etc.

I need to bring up my credit score just a bit and reduce our consumer debt a bit so we can qualify for an FHA loan and house hack our way into a MFH.

@Kenneth Hayes  undoutably 250k with no collateral is simply massive credit card debt. tread carefully on htat one

Since in the case of the OP there was no broker for either side, then deposit money should have been put into escrow with a tile company (or other business that handles real estate settlements for that area).

Assume good debt-to-income and 740 credit score with a foreclosure in 2012.If BiggerPockets allows, can you refer me to your lender.