Purchase Terms: Clearly outline the terms for your brother to purchase the property from you, including the timeline and price.To minimize the financial burden on your HELOC, refinance the property into a traditional mortgage as soon as possible.                                                                                           

Private Money Loan: Private lenders might be a flexible option, especially if traditional routes don’t work.

Id keep looking if it was not an approved short sale ( even an approved short sale takes a very very long time and theres no guarantee that you will even close on the house after months of waiting). q1)There are plenty of non traditional lenders that could offer you construction financing if the numbers make sense but it will cost you with points and a higher rate.

On the other hand, if you're aiming for long-term rental properties, getting prequalified with a lender specializing in traditional loans or DSCR (Debt Service Coverage Ratio) loans is key.

This strategy can generate higher returns than traditional rentals, but it does come with increased management requirements and potentially more volatility.

The benefit is significantly less red tape compared to working with your traditional local banks who also do new construction financing.

Hard money loans typically have higher interest rates and shorter repayment terms than traditional mortgages.

@Jay Hinrichs exactly the risk is even more than traditional development and the profit is actually less with more operational headaches.

Reason why is because FDIC Bankers "Do Not" charge points on traditional programs like primary homes, standard investment purchase and refinance, Second home/vacation homes.Lenders, Brokers all charge points to meet their Loan officer compensation plan (commission).

I talked to my lender contact and, as Kerry mentioned above, it's pretty uncommon that a traditional lender would offer a HELOC product on an investment property (non-primary home).