It sounds good to work with a local banker and consider the investment itself rather than a deep dive of my debt to income.  

So your first up is to go down and take a look at your credit report, and see a mortgage broker about your ability  to borrowGo to www.upgrademycredit.com and invest in helping your credit history so that you can borrow moneyRemember that that debt to earnings ratio is the number one reason why people get denied  for mortgage, so be willing to get a second job to increase income.Start saving money every month even if it's only five or 10% of your net and put 50 to 100 bucks in.  

Of course this will vary on credit score, annual income, income to debt ratio needs to be considered especially since you will be having to deal with two property loans, and other general qualifications (PITI reserves).  

If anyone in CT/PA is willing to take on a low maintenance mentee from NYC I would be forever in your debt  : ).  

Another really nice benefit is the lack of personal debt.

It is easy when you buy and hold to tap out of being able to get loans from banks pretty quickly due to debt to income ratio.

Does the defaulting homeowner want to move in exchange for forgiveness of the debt?

YIKES.That plan will only get you so far, then the banks will start saying no because of your debt ratio.  

Paying off personal debt with sales proceeds from a 1031 sale is the same as taking taxable boot.  3.

Sellers need to know, agents need to know, settlement agents need to know and lenders need to know your ability to perform and lenders need to know the source of your down payment.