This would allow us to come to the table with less funds out of pocket on the front end when starting construction.Is the best way to complete the transfer of ownership through a traditional sale registered with the county? 

Your case is indeed a challenging one, especially when traditional lenders are hesitant. 

Phoenix contains a rare combination of elements that have created an outstanding market for distressed property investments, including the following:Cost Savings: Distressed properties are sold below their market value and enable investors to take hold of properties at a trifle compared to traditionally listed properties.Strong Market Fundamentals: Being among the fastest-growing cities in the country, Phoenix ensures a high demand in housing and rentals, hence good potential for resale or income from rentals.Value Creation Opportunities: Most distressed properties need renovations; thus, such situations present opportunities for investors to increase equity by adding value.Population and Economic Growth: Phoenix remains among those cities in the country which are attracting more and more residents and business; therefore, this presents good, long-term appreciation possibilities of property appreciation and income creation.Challenges to ConsiderWhile the rewards can be great, distressed property investment is not without its challenges.

Quote from @Karen Smith: With more investors turning to private money lenders for faster funding, what benefits have you seen from using private financing versus traditional bank loans? 

Traditional bank financing.

I am also a huge fan of real estate and for the past 50 years there's been a way to combine both.By leveraging a Self-Directed IRA, real estate investors enjoy both the traditional advantages of property ownership and the additional tax benefits of retirement accounts, creating a powerful wealth-building strategy.

Yes but you will need to look for a local commercial bank to facilitate a HELOC or try a commercial lender for a traditional cash out loan.

We used traditional means, like Zillow to find the property.

I've done refis with section 8 tenants in the units from traditional banks and dscr lenders.

Traditional 30 year investment property home mortgage at 3.25%.What was the outcome?