As they were month to month we were not concerned with their discounted rate and we moved forward to sign the purchase and sales agreement. 

I don't allow pets and would send the tenants notice that their animals or they and their animals will soon be leaving.

I would serve her a notice of lease termination/non-renewal, and if she leaves on 9/30 then deduct any late fees or rent shortfalls from her deposit (although I would still be trying to collect it from her all the while). 

The edgier lenders will require you to insure at least to cover the amount borrowed because... their name will be on the insurance settlement check along with yours and they will be happy to cash that check and close your loan account leaving you to figure out what to do with a heavily damaged home.Scare tactics?

My concerns are I am currently working on my credit (low 600 Fico), I have limited savings and the house is in need of renovations to bring it up to date.

Which leaves me with price - if you dont get enough requests to tour the home one of two things are wrong: condition (as indicated by pictures) or price. 

That leaves < $10,500 for down payment and rehab of next property? 

If I rent out the last unused bedroom, I will cut my out of pocket expenses down even more (which was my goal when buying this house to stop renting) and I would end up only paying for utilities and a few hundred bucks of the mortgage.The reason I haven't rented it out yet though is that I'm concerned it'll force one of the tenants to want to move out due to having to share a bathroom with one more adult.

I was concerned that since I wasn't buying the home I wouldn't be able to mortgage it.

The carpet is perfect ( we don’t have pets and don’t wear shoes in the house) and im a clean freak and will clean that house very well before we leave.