The only other option that comes to mind is to make the improvements and try to achieve favorable rental rates to push the story that 2 BR homes rent for a premium because its unique.

For instance, Berea is a charming college town, but the combination of local taxes and less favorable price-to-rent ratios makes it less appealing for investment compared to other areas in the state.Agree here! 

Quote from @Matthew Beninate: Quote from @Sarita Scherpereel: Quote from @Seo Hui Han: You may want to consider local banks / credit unions just because many of them will require or give you more favorable terms for things like HELOC's and other line of credit products if you have a deposit account with them. 

The numbers may not be that favorable in LA for this, I don't have enough information. 

Some local lenders familiar with Gainesville’s market (from what I’ve read in Bloomberg) like SunState Federal Credit Union and Ameris Bank have been mentioned favorably latley and might be a bit more flexible if they understand the repositioning story behind your property.

Negotiations focused on securing the property at a favorable price, enabling us to achieve a profitable margin in a highly competitive market without requiring additional renovations.

The barrier to entry seems high, and the price-to-rent ratio isn't very favorable.

@Justin FondrenIf your credit score is in the 700–730 range, you're in a great position to secure favorable loan terms.

These properties can provide cash flow and diversification while qualifying for favorable residential loans.

With your brother’s $50K equity already in the property, this should make the loan-to-value ratio favorable for refinancing.HELOC monthly payment on $68K: ~$300 (depends on your rate and term).Lease payment from brother: $800/month.Future mortgage (refinance $68K over 30 years at 6%): ~$400/month