It’s because having cash available doesn’t not necessarily mean the borrower has the credit CAPACITY to obtain a loan.  

We didn't because we needed to provide POS in order to obtain our STR permit being that previous owner had a permit on the property already.

While this is municipality dependent, if the contractor is not licensed you likely cannot obtain the necessary permits and approvals.

There will also be many homeowners who have had the properties in the family through generations and own free and clear but now still need to obtain a construction loan to rebuild. 

Yes I definitely need to obtain a network of brokers locally here in the commercial/multi space.

I would focus on improving your credit and obtaining a more stable income so that conventional financing is an option. 

Credit (loans) become much more difficult to obtain and if available you pay a MUCH higher interest rate with a much higher down payment requirement2.

Many real estate investors opt for a fix-and-flip loan because they’re relatively easy to obtain: no personal income verification (no DTI requirements), and you can often borrow up to 90% of the purchase price and 100% of the rehab costs.

Now I question if I will be able to obtain fire insurance.  

No deal(s) just insights & offers to obtain a premium membership that cost ten times the membership you already have (with monthly or annual dues).