In this tight inventory market, it's far easier for you to find a 70% ARV home than it is a 60% ARV home to have room for an assignment fee.Obviously, we do it every day in both categories, but I'm also a Licensed GC with dozens of crews, a full office team including a rehab manager, etc... so it makes flipping very easy for us.Flipping is much riskier from a time, money, rehab, construction, crew, theft, vandalism during ownership, lawsuit, insurance, holding cost perspective....but we still do plenty of them.We used to be 80-90% retail flips. 

The lender said the only way they would accept the rental income is on a conventional loan that I MUST have 20% down payment.

We’ve been preapproved for conventional financing.

If you want to do a lease option do it yourself, or just sell the place in the conventional way.

I probably would not get approved for conventional lending right now so I struck a deal with my first property with owner financing.

Inventory is varied and housing is cheap.

Or perhaps cash-out refi your rentals if they're not already in conventional loans?

Coops also normally carry a mortgage rate premium (~1% above other conventional loans).So, right now the mortgage is paying for itself, and cash flowing for me.  

You can find both in Oak Hills SchoolsThe lack of 3-bed rental inventory, especially considering the number of renting parents that look to get their kids into Oak Hills (and stay in one place for several years!)

Should Jonhny get a conventional loan and wait 6 months to refi and do repairs?