I've been doing a lot of research but can't seem to find a definitive solution to my somewhat unique situation.
My wife and I own an investment property in PA (currently used as a short term rental / AirBnB) that's worth approximately $150 - 200,000 (prices have skyrocketed with the pandemic, so don't have an exact figure) and is fully paid off (no mortgages, liens, etc.) We live in a rented apartment in NJ.
My credit history is completely shot with a scores in the low 500's, several charge-offs and collections resulting from me going AWOL on all my debt around 5-6 years ago. I'm in the process of settling/paying things off but it's going to be a long process. I already have a solid plan of action and am working on this.
My wife's credit history is perfect except for the fact that it's relatively new ~4 years (she's relatively new to the country).
We file our taxes jointly and pay very little taxes as we're both self employed and write off a lot of things. We plan on writing off a lot less things this next tax year to show a decent income.
We have about $30-40k cash available to us for a downpayment.
We're looking at purchasing another investment property with the purpose of renting it out short term on AirBnB/VRBO in the same fashion as our current house. No particular property in mind at the moment, but generally looking at something between $100 - $300,000
Now on to the questions:
-Would it be possible for us to put our existing house up for collateral in a reverse mortgage, put down a decent down payment and get a mortgage considering our credit and income situation?
-Would my wife have a higher chance of getting a mortgage if she applies without me and with a co-signer?
-How much income do we need to show to increase our chances of getting approved in either scenario?
-Any other recommendations?