-Decreased security deposit to 1x for MTR.

Another option is hard money for the purchase and rehab, which is paid off with a Rate/Term or cashout refi afterward.I would not have her deed the house to you so that you can borrow against it if she's selling it to you and not giving it to you.

Prom notes are a security unless exempt .. 

The condo will limit the rental options to age restrictions. 

I’ve had to widen my search radius to smaller suburbs or target properties needing light cosmetic work to make the numbers work.Value-add opportunities: Adding amenities tenants love, like finished basements or upgraded kitchens, seems to justify rent premiums in this market.Navigating the competition:Be creative with financing: Seller financing or partnering with other investors has been helpful to secure deals when conventional offers didn’t cut it.Work with local agents and wholesalers: They often have their finger on the pulse of off-market opportunities, which is critical in a hot market.For those new to suburban Chicago investing, I’d say the key is finding the “sweet spot” neighborhoods—ones on the rise but not yet maxed out in price.

As others have suggested, you could get a conventional or FHA loan if you want lower down payment options.

Would a home equity loan be a viable option in this situation, especially in regards to eliminating some of the red tape I'm running into with a refinancing an scorp-owned property?

Since the BK must be disclosed in any securities offering, you would not be able to be a partner in a syndicator/sponsor type deal9.

I’m not sure what is the best option here, if anyone could shed some wisdom that would be immensely appreciated. 

Loan interest is deductible based on the use of the loan, not the asset securing the loan.