Here are the stats: Construction costs - $50,000 Purchase Price - $225,000 Current Appraisal Value - $375,000 Post Construction AV - $440,000Current Loan Amount - 195,000 Rental Income - $2,800 Mortgage + Taxes + Insurance - $1650 Liquid Cash - $10,000My partners and I want to get the remaining projects off our plate and are trying to figure out the best way to make it happen.

Here are the stats: Construction costs - $50,000 Purchase Price - $225,000 Current Appraisal Value - $375,000 Post Construction AV - $440,000Current Loan Amount - 195,000 Rental Income - $2,800 Mortgage + Taxes + Insurance - $1650 Liquid Cash - $10,000 My partners and I want to get the remaining projects off our plate and are trying to figure out the best way to make it happen.

After calling my lender he explained that I need at least 6 months in reserves that I need to show via savings or liquid funds such as retirement or other investment funds.

it seems as if you are getting denied not for bad credit or experience purposes but probably a lack of liquid assets.  

The main things we look in regards to the individual is 1) Liquidity 2)Net worth and 3) Contingent Liabilities (Are you a guarantor on any other recourse loans that may threaten your liquidity and NW?).

Currently the scenarios I consider are:1) Housing slumps: reduced liquidity and rent decreases ..2) Money lenders calling a loan for some reason..transferring title to LLC etc.3) Uninhabitable property... fire, flood etc... 

If you need to sell your primary to get liquid do it soon, and dont fall for the "wait for the top" mentality, as you only see a top in the the rearview. 

Do not include any late fees in the total as CA courts view those as liquidated damages and may reject a notice that states a higher than owed amount due.

He's trying to sell for $39.5/sq ft 2 years later. the narrative I'm told is that he wants to move back to California, and wants the liquidity for a project there.

There are several good funds such as Broadmark and Arixa that give you conservative loan-to-value, instant diversification into hundreds of loans, the ability to liquidate quarterly after a lockdown, etc..