I was unable to gain favorable leverage due to some credit issues. 

However, you would likely take a pass on this property since the numbers don't work in your favor.  

The general approach would be to place the property in your personal name in order to refinance it at a more favorable rate - financing anything directly into an LLC will often come at a higher rate.

I've been using Zillow and Realtor to find deals but a lot of the those property shows a negative income and don't become favorable until you offer 1/8 of the asking price.

Do your best to make up for this situation and have it sound favorable. 

Favor tends to go your way.

Some people think banks treat their own loans more favorably than that of their broker partners, but that's backwards and shortsighted to think so.

I know that it is common practice to use HML for financing flips, but what are the draw backs of using HML to get favorable pricing on a buy and hold then refinance to traditional financing right after?

Split the deal more favorably to them at first.

If you're relatively new and acquiring your first property, do it on your name because financing will be easier and you'll secure favorable rates.