My broker has contacted the bank, and the loan was confirmed not paid (yes, he should have done that before closing).

IMO, over leveraging doesn't apply to solid cash flowing rental properties, especially if you have 6 months of reserves set aside.

Says he'll stay up till the clock hits 12:00am, with the computer ready and Zelle me the other half, and thanks to modern technology I got the confirmation at 12:10am.

(You need six months cash reserve in order to be approved.)

You should check and confirm legally what the property is before trying to turn a 2 into a 3.

If you have 40k in total reserves and decent credit you can expect to have enough cash to be able to close on a $150,000 home with an added rehab budget.

Can you confirm?

Even if it looks like a real law firm, confirm it isa real one, correct address phone, etc.

  $125,000 - $40,000 = $85,000 less realtor fees to sell it, and will a lender finance it in it's present condition.Also, those pier and beams go out of wack all the time and maybe just adjusting them will fix it.Some of the older homes are jacked up with all kinds of automobile junk yard scissor jacks and Auto Zone bottle jacks, piles of rocks, stacks of 2 x 4's on grade, wooden shingles, tar shingles, etc... vs proper peirs.So maybe one of the renters (or one of their friends) crawled under there and removed the jacks to use on their car repair or sell at the pawn shop for beer money and now the floor bounces.Meaning get a 2nd opinion from a pier company (that's legit, has an office and a website, etc...) and have them confirm the ROT--if any.Because the floors do rot (sometimes) and also the piers go out of wack and sometimes also sometimes disappear into thin air--and no one knows what happened to them.Getting a 2nd opinion on if there is rot--with cell phone pics of it--would be smart--if none then adjust/replace the jacks.Good Luck!

I'm a fan of less-restrictive laws, but have reservations about the long-term impact.