Long time lurker here. I have spent the last 8 or 9 years buying, improving, and selling businesses. Maybe some of my experiences can help you out.
I consider myself to be very good at what I do - BUT, not every business I have purchased has worked out well.
To give you an idea of what I mean, here's the gist. In December of 2012, I bought the business that is currently my biggest business. I paid $5000 for it and it was a business that wasn't earning money yet. I now have that business producing between $30,000 and $40,000 per month most months.
That sounds great right? Well... Earlier this year I bought another business for about the same price and it was already making money. The problem is that with that business, I just haven't been able to get it to work. I have spent a lot of time and money on it and over the past six months, I have only lost money on it. Basically, it's a business that can make a small amount of money if I put all of my time into it, and isn't profitable if I have other people trying to run it.
The point is this. I think I have pretty good instincts and most of the time when I buy a business, it works. Sometimes, it doesn't. For this reason, I would never risk my house to buy a business. There will always be other businesses to buy and it sounds to me like right now, you are very close (but not quite) in the position you need to be in to buy this one.
I'm not the kind of guy who presses my opinion on other people and ultimately this is your decision and I'm sure you'll make the right one for you. I just wanted to give you an outside perspective based on what I've seen in my businesses.
I do have a question for you though, since this is a somewhat large purchase price. What do the books look like in this business? What are its gross and net revenues? Also, how much expertise do you have with the niche the business is in?