Evaluating a Potential Rental Property

Have you ever wanted to do something but everyone you talked to about it seemed to think it was too much effort to move forward?  I hate that.

There are currently 2 condos for sale where we live.  One was selling for $68,000 and the other is listed at $99,000.  Yeah, good luck with that.  The most I've seen any of these sell for is around $80,000 and that was quite a few years ago before all the prices started dropping.

I happened to notice last week that the $68000 unit was foreclosed on and they dropped the price to $61,900!

These are the hurdles I've faced this week:

1. Condo Association - I was under the impression that a decision had been made to not allow anymore condos to be used as a rental. But when the price dropped on this unit, I decided to check into it.  And Guess What?!  A decision was never made.  At this point if we purchase this unit it will grandfathered in as a rental unit.  But, the next condo owners meeting is Monday and we're still working out the financing so I'm hoping they just don't come to a decision at the meeting.  Usually not enough people show up and we have to have a vote done through the mail which would take a while.
2. Down Payment - On our last rental we had to put 20% down and pay for closing out of pocket.  It came to a lot higher number than I had anticipated and we took a lot of money out of savings.  Our closing costs came to $4700 when I was originally told anywhere from 3 - 5% of cost of purchase which would have been at the most $3400.   Mr. R and I decided if we go through with this purchase, we aren't comfortable pulling so much cash out of our savings this time so we need to find a way to finance the down payment by pulling equity out of the properties we already own.  Banks weren't very cooperative in this but I found a local credit union that was very helpful so I think we have this figured out.
3. Checking out the condo - From the pictures on the internet, it looks like a nice unit but not as nice as our other two.  I met with our real estate agent to view it and it was actually really nice.  It has some great features that our other 2 units don't have.  We would have to replace the water heater and there is a stain on the carpet in the living room.  If we can't get it cleaned up, we might have to replace that carpeting.  Other than that it's in good condition and pretty much move in ready.  
4. Financing - I talked with a mortgage lender that was recommended to me by our real estate agent.  This woman was really nice and told me upfront that there are going to be a lot of hurdles to jump through to get this property but she would do some research and get back to me.  The issues are:
1. This will be our 3rd mortgage so the lending guidelines might be more strict and we may be required to put more than 20% down.
2. It's a condo.  Apparently it's harder to finance a condo.
3. It's a Home Path Home which requires lots of additional paper work.

Moving Forward: As soon as we hear back from the mortgage lender, I want to go back and have Mr. R see the unit and then make an offer.  We are going to offer lower than asking since it's a foreclosure and we know the bank won't fix anything for us.  

We already own 2 of these condos so I'm confident this is a great investment.  I've ran the numbers too to make sure.  We live in a great neighborhood with highly ranked schools.  The condos are right next to a beautiful park.  I know the area and I know what we can expect to get as rent.  Our other unit rented with in 2 weeks of closing on the deal.  In those two weeks, I had tons of phone calls on it and did about 10 showings.  It rented for $825 per month.