You need to save up the funds.

Meaning you may be able to do some cosmetic or smaller renovations like bathrooms or kitchens in your duplex when the tenants turn over and those smaller investments can demand higher rents, so in the longterm you may have more cashflow from the duplex to help fund a future investment in another property while you wait for market conditions to change.

If not, how much are you all "throwing away" on rent when those funds could be applied to ownership?

What I'm planning: buy and hold the property, brush and clean it up with intent to hold until cost of funds drops a little in 4-6 months.

It sounds like the biggest fear is getting funding and getting started without making a big mistake.

They also want a priority lien on the property.It sounds like you are looking for someone to fund your down payment, I would be looking for an equity partner over debt as nobody likes to lend money in insecure positions, especially when a borrower lacks skin in the game.How much are you planning to come in with yourself?

I have been funding these types of props since 2002 for a turnkey company in Detroit who used LA based sales agents then over the years I have met most all of the Marketing companies or they have sold clients of mine props I see the commish on my huds. 

Also, hard money lenders want a scope of work filled out prior to funding the deal so this is a good little hack to get one as well. 

It is still better than putting 20-25% down and not forcing equity appreciation though.In reality, before you start getting investors lining up to fund 100% of your deals you will probably need to prove yourself in some way.

I do not think options 1 and 2 are mutually exclusive, in fact I think you should do both.