That’s just barely over the 1% rule .

I’ve been pouring my extra money into my current mortgage and now that I’m ready to buy #2 I have barely any cash to put down.

No stairs, pink & yellow tile, shag carpet, floral wall paper padded toilet seats. 

But even if we sell, there are repairs needed to be done and because we wanted to offer asap for the new home, we may only have the option of cash buyers like Redfin.com who valued our home low that after their 7% fee and repairs, we're left with barely even anything for our DP/CC/moving costs.

First see if it will pencil if you just do the basics and just turn the upper floors into apartments and if it will cash flow (bare minimum to get them livable without added amenities. 

But one of the PM that we spoke about told us that from his experience relatively cheap houses ( he was saying that single family house  whose rent is lower than 1000 dollars is in the category cheap) attract people with low salary, and that basically then are barely surviving, which means that if they have any serious problem in their life, child sickness, car being broken down, tooth problems, they will not be able to pay, which will lead to either slowing down of everything, or them not paying at all, or not even wanting to move out, an then he layer and just losing the money.  

If they barely meet income requirements now what happens when they have to pay for daycare and diapers?

I am going to take small exception with your categorization of this as a barely successful flip. 

Of course this is just a bare bones explanation.

P&B are usually much cheaper to work on (sometimes not if it’s low to ground, poor access, and/or wood rot and termite damage.But, never a need to get scared off, sometimes those are good opportunities if you know a reliable foundation repairman