I am new to this so I am running out of ideas but in reality to start living together we need a 4 bd house for our 3 kids and a bunch of pets so we know it would be a house around $800K until we can make more money from our jobs and side hustles.

If your tenants lose their jobs, then they should also be expected to move out of the rental. 

The equity she wants is $55,000, which I don't have in cash fully, but I own a home now with that in equity, and I have money in an IRA. 

Where I am in Texas if it is a normal loan from normal bank, they step in the day before the sale or morning of the sale and get it resolved and the property never ends up in the sale.If the loan has small balance, or is some kind of private money loan or I would say unsophisticated lender then some chance it goes to sale.

If you are serious, this will be 100% worth whatever time and money you spend to do this. 

The bank from my understanding will be writing off a loss on this loan as there is not enough money to go around.Here is where it gets interesting, there is a second lien on the properties from a seller of a hotel that the current owner of the 21 unit bought seller finance. obviously there is not enough money to get this guy paid off as the bank is already taking a loss.

Not trying to be a dream killer but there is simply no money to be made in the D.C. no cash flow, no margins to flip, labor either to flip or just hold a property is insane, the money was made years ago, even going forward I see limited appreciation, investing is HARD everyone these days but to the extent there is money to be made you have to go to places that haven’t popped yet.

As a seller, financing can make you a lot more money, but gives you risk.

Better to let the money sit under your mattress.....

You'll have something to talk about, and you may even get money for the deal.