To be honest I'd be scared to take on a house in that condition, mostly because I'm inexperienced haha, but I'd like to know how it turns out out for you!

We want to simplify life, not to mention the acreage is worth a good bit but demands little for rent... it's appreciated nicely for us, but in the end of the day I'd like to put that capital to work in the form of more traditional rental homes.

If you are an independent contractor with multiple years operating in your business and reasonable consistency in that income (you don't have one year with $30K and one year with $200K and are trying to claim you make $200K) then you need to keep calling lenders until you get one who can work with you, in my opinion.If my real estate side business and my book royalties from Set for Life (next year) can help me qualify for a loan, in addition to my W2 income, then I don't see why someone with consistent income from self-employment is having trouble -- perhaps the trouble is more in demonstrating consistent income from a sustainable source? 

She may wish to get her life on track some day and decide to settle.

Ideally the property will have one unit that is in livable conditions so I could get that rented out right after purchase and then update the other unit. 

However, he refused the offer and is now threatening to take legal action if he doesn't get the security deposit in a week. 

I live a relatively minimalistic life with little debt (minus my mortgage) I am on bigger pockets exploring how to keep the real estate ball rolling!

He is generating $150 extra after mortgage, bills, and saved costs for repairs.As we move into the direction of life and family future, we are looking at ways to create more financial freedom.

Our underwriters just condition for "legal counsel to review and approve ABC Trust" right alongside the stuff like "updated bank statements" and "verification of employment."

So you could start out that way and then maybe not need one.Or you could short sale it, etc.Rehab would be the last ditch effort I would ever consider.Location, condition, etc are all known before you ever buy, so it not like you HAVE to buy it or will get stuck with it.Do your DD, REAL DD, not this electronic nonsense and youll probably be okAnd on $5k, a 15% return is only $750...