Wouldn't it make more sense to raise money privately?

The checking account can act as the home for the funds until you deploy the money into and investment, then all expenses and returns flow from and into that checking account that you control. 

I know it is expected that you will need to spend some money after someone moves out but I just didn't expect I was going to need to spend appx. $10k to get it rental-ready. 

Using money from an appreciating asset just to pay your landlord doesn't seem like a good flow of money.

Hard money loan that covered 100% of rehab and 90% of purchase.

For the most part, most lenders are going to be relatively close in cost assuming we are talking about a straight forward loan product, we all borrower from the same pool of money to make these loans. 

By donating the owner will have the money they want.

Also, after a year, the mortgage hasn't been paid down by much, especially if it's a 30 year mortgage.The only challenge you may run into is if you purchased it using a low or no money down mortgage option like FHA or VA lending.

It really becomes a time value of money calculation based on when you want to sell your Class A rental.

Hi @Alex Lee I would avoid 203K loan and work with conventional renovation loan based on knowing you'll be forced to use 203k certified contractors which will cost more money and offer inflated pricing because they must follow 203k guidelines.