If not, I'm guessing it would be treated as a traditional rental loan, either conventional or DSCR, using market rents rather than the rent in the lease agreement.

A traditional bank will not give a line of credit even if there is significant equity because it boils down to being able to pay back the money. 

Private Money Loan: Private lenders might be a flexible option, especially if traditional routes don’t work.

With the high interest rates it hard to get much to cash flow with the traditional 30% down. 

The problem is: A traditionally financed low-down payment house-hack with traditional long-term rents simply won't cash flow during occupancy, or after, in many MCOL-HCOL markets in the US. 95% leverage at even 5.7% just won't work in a lot of cases right now.

Typically, the tax is based on the assessed fair market value of the property at the time of the transfer, even if it’s not a traditional sale.

Id keep looking if it was not an approved short sale ( even an approved short sale takes a very very long time and theres no guarantee that you will even close on the house after months of waiting). q1)There are plenty of non traditional lenders that could offer you construction financing if the numbers make sense but it will cost you with points and a higher rate.

Right now, it is incredibly tough to make even a few hundred a month with traditional strategies.

On the other hand, if you're aiming for long-term rental properties, getting prequalified with a lender specializing in traditional loans or DSCR (Debt Service Coverage Ratio) loans is key.

This allows you to access funds while keeping your existing mortgages intact.Second Mortgage: Explore lenders who offer second-position loans on investment properties, though rates will be higher.Cash-Out HELOC : While traditional banks often restrict HELOCs on non-owner-occupied properties, some portfolio or private lenders may offer HELOCs for investors.With $15-20K in liquid funds, look for deals where you can negotiate terms:Seller Financing: Negotiate lower down payments or interest-only periods.Subject-To Financing: Assume the seller’s existing mortgage while covering the down payment.Lease-to-Own: Lock in the purchase price while using rental income to build equity.