That's going to continue to be an issue unless Michigan stops tying property taxes to school funding.

Im going assume since you put funds into the unit that its "move in ready"?

Lacking much in funds, my summer has been spent reading and learning as much as I can.

Seems like that would be sufficient proof. 

Based upon this I would look at an actual dollar amount, not percentage that: 1) enables you to live in a safe neighborhood and decent schools district, is modest in size and fixtures, and has payments sufficiently small that you are still able to invest at least 10-20% (or whatever your target is) of your income. 

If you don’t leverage you might as well invest in a passive index fund.

Nicole - the HELOC is a good option for the  down payment source …..if you dopnt already have the heloc in place ..get it in place  for as large of aan amount as possible  …….once you locate a property to purchase - you can then  determine if the HELOC  is something you want to use for all or part of the funds needed

My guess is your original contract with the seller is not sufficient.

Considering all funds are going to senior holder, it seems logical that the two banks would negotiate in order to complete approval process.Is that how things go?

Ill try to insert a link for analysis if anyone is interested in seeing it, very basic.What I am concerned about regarding finance is it tying up all my funds if I cant refinance to get the equity out within a few years.