Lenders also have interest only options that could help with cashflow especially on acquisitions to allow you to get the listing up, and have your listing gain momentum (some listings start off slow while they accrue bookings, reviews, etc.)

My question is should I keep working with this small local bank, is this a good deal, can I get a better deal, what are my other options for scaling as a small real estate investor.

I am in California.Cash for keys is always an option.

What are my options now?

My wife and I have a 9.46ac parcel in Umatilla (Lake Co) FL that is a lot smaller but we've explored similar options.  

Definitely look into HELOC/cash out options, but if those don't work in terms of rates or availability I'd suggest using the existing cashflow from your multi to offset a primary mortgage, and then find a primary with an ADU.

Once you get a flavor for lending options you should run a proforma and determine how much return the project will be able to generate on its's own and how much return will be left for LP investors if you go the syndication route.

They are nice and guests like them, but obviously there are much cheaper options on Amazon. 

Or renting out by room can be an option for better CF. 

Hey Alvin,Yes investment HELOCs are an option depending on the details.