Is this using a 20% down, conventional or DSCR loan, although I would think a first time investor would use a conventional loan.

typically no special license is needed when doing it for hard money loans that I am aware of. there may be states like california and nevada that are tricky where lenders need a license of some sort but for most part brokers i have seen are not licensed. 14 or 15 states require state license and NMLS registration.

We are in Los Angeles, and although we do not own anything in SD, we hold a loan on a portfolio of SFR's there that is not performing at the moment.

Option 1: The loan that the owner has is an assumable loan at a 3.875% rate and still has about $265K.

We see it all the time with the conversations on what cars/vehicles folks drive :) here in BP there is a badge of honor to drive a 20 year old 250k mile car/truck :) Myself I saw my dad do some of this although he never got to the utra wealthy stage by a long shot but made good money in RE however it was not until he bought old style timeshare in Maui that he would finally take a vacation..

Quote from @Arshiya Taami: I am planning on purchasing a profitable business with its real estate included in florida and the dscr is 1.85. the problem is im just short of 600k for the down payment. that being said, can anyone provide me any reputable loan companies that will offer bridge loans and what their requirements are. thank you in advance! 

You would need to let them know you are 2nd lender and want to pay the loan off.

Once construction is complete you could refinance out of the construction loan into a DSCR loan.

Are you looking for better loan terms from the lender?

FHA loan through my mortgage broker associates.