Also is there any recourse here on the attorney's involved and/or how does title insurance help us.If the buyer walks we made additional renovations at their request, and we are at risk of defaulting on our loan, to which our homes are cross collateralized.  

While there isn’t an exact, commonly agreed-upon definition out there, here is a handy definition for this specific loan product:DSCR loans are mortgage loans secured by residential real estate turnkey properties, strictly used for a business purpose and underwritten primarily based on the property.Important note: DSCR loans refer to the specific loan type, and the “DSCR ratio” (debt service coverage ratio) is a metric used for underwriting and evaluating these loans (and other loans), but the metric and ratio itself are distinct things versus what is referred to as “DSCR loans.”Some key things to note in the definition:DSCR loans are secured loans (meaning that there is collateral that the lender can take if the borrower doesn’t pay back the debt).

., revolving credit line collateralized by stock / bond portfolio) instead of HML / private loans to finance upfront purchase / rehab Would love to get the community's input on the various ways to structure the business entity (LLC?

Don’t pull any out.Talk with the lender on a line of credit using this house as collateral.  

Or is the bank more open due to the collateral already set in place (the equity on the home)Ideally, I would buy distressed properties and fix them up before renting.

Sounds like I will need to put up the property as collateral to fund this.

keep saving as you wont be able to obtain financing in the near future then buy RE for cash, this will be your collateral in the future transactions. another option is to look into FHA loans and do house hacking. good luck! 

Or collateral at 65% of value? 

Here is how most work:Rates: 10% to 14% (Most Deals are 12%)Terms: 1 Day - 24 Months (Most Deals are 6 months)Fees: 2-5 points(%) of loan amount paid at closing (Most Deals are 3 points(%))Minimum Loan Amount: $50,000 Max Loan: 65-70% of After Repair Value(ARV) 100% Rehab Financing Available (Most Deals require 20% of purchase price down payment or cross-collateral)Closing Timeframe: 48 Hours - 3 Weeks (Most Deals are 10 business days)NO PRIMARY RESIDENCES, NON-OWNER OCCUPIED ONLY, BUSINESS AND COMMERCIAL USE ONLY.

They'll use a separate piece of real estate that they own outright (appraised at $500,000) and some of their own capital to finance the renovations and sell the property within a 2 year period (note that they could also cross-collateralize both properties to gain additional equity if needed).