Does it hurt them, it could but they also could provide a bank statement showing their payment every month.

But get an LLC and rent from it personally...any cleaning expenses, paying your mortgage etc. come from the LLC's bank account, any outside money that you need to fund the account will be a capital contribution and then you will be able to do cost seg on that property.

For example, hard money loans can help you get started, but be sure you have a solid exit strategy like a bank refinance or sale once the rehab is done.Feel free to reach out anytime you need help with financing or have any questions!

I have heard of instances where one (the borrower) is allowed to choose the appraisal company or put in a recommendation for one which the institutional bank may honor, and then the person already knows someone there, that they have gotten to know with time from other projects, and it's not unnaturally inflating value but favoring a good one to keep the reoccurring client.  

Go down to your local bank branch, hopefully it's a smaller bank (they will have better rates and service and be more thankful), and ask about HELOCs.

If it is out of state and your banker has no interest, find a local bank for that area.

Another option would be local banks/credit unions since they are known to lend on smaller amounts like thisMaybe @Owen Dashner can help?

If you put 25% down like the banks want you can at least break even or make a little on good deals. 

I received an almost identical letter from Texana Bank.

You can almost certainly get a better deal with seller financing than bank financing right now, I'd try that first.