Option 2: I found a house that the asking price is 930k , but I’m sure I can get a discount on it because it needs a lot of work , it doesn’t qualify for traditional financing , so I would need to take a hard money loan , it needs about 150k worth of work , the plan would be to offer the full 930k asking price but ask for a 6% seller concession , I calculated 20% down payment and 7% closing cost , so total after seller concessions comes out to 21% down payment which is $195,300 .

Personally I wouldn't get into an investment that only provided a 5% CoC return.

We asked the sale agent that what happen when we want to sell our home in the future and he said you can transfer it to another person.

(Approach - 2) - He says that if he is asked to pull permits, he is not responsible for any additional work that the inspector may throw (basically more money out of my pocket on the rehab costs).

You have closed on your hard money loan and now it is time to get your rehab going......I created a list to save you some time:  Please use the following building permit checklist if you are planning a rehab in City of Atlanta.1.

It’s as if you gave the money to every contractor who suggested a repair. 

Of course, I don't want to waste money so I think building ROI with another money producing property would be the smartest decision.

While DSCR loans usually focus on property income, some lenders still verify your personal financials for added security.

effectively, you'd either need to look for a lender that would let you use the other property as collateral (cross) so that you can avoid actually taking the cash-out (this is rare in terms of institutional DSCR lenders, but fairly common in the hard money or private money space)...

My goal is to always help bigger pockets members save time and money.