@Steven Pool It's an investment property that in going to pay cash for then fix it up to be a Rental

Refinance the 1st house and use another $60-70k to buy another house in my back yard?

Personally I feel allowing pets lets me charge higher rent and have a greater pool of tenants to choose from, so if you feel the same way keep the old floors as long as possible.

They had built a custom home on it along with a pool house and barn/office structure. 

Interest rate changes don't have much impact on the tenant pools of C class areas or lower because people that need to rent in those areas likely won't be able to buy regardless of interest rates.Of course, higher rental demand reduces the risk inherent in all rental investments, regardless of leverage use.

So they set all of the gold cars they saw in the parking lot on fire.No caption necessary for this toilet from hell.This is what a kitchen can look like when a low income tenant moves out of it.This is what a backyard can look like when a low income tenant moves out of it.If tenants in these tough neighborhoods don't have yards, don't worry they will light off their fourth of July fireworks in their bathrooms.Don't worry though.

If it is then you actually open up more of a buyer pool if one unit is vacant when you list. 

But do your due diligence, talk to property managers, and get a feel for your tenant pool and if they are going to cause too many headaches.  

If your home is under your name, and you are sued and your home ends up in the asset pool (it is an asset) what then?

Big back yard.