Like any traditional loan (especially for real estate lol) it takes a while to get through the paperwork, but if there is an error or something you need to fix, you might have multiple months to be able to fix it WITHOUT closing the application.

Currently we are buying with cash, rehabbing, then taking a traditional loan out.

I had great training for this, taught middle and high school in C minus neighborhoods so guess what, many of the kids turned into renters ... it's an unbreakable tradition.

Are you obtaining traditional financing to acquire the property or is the seller financing the sole source of debt? 

Pro’s: keep cash reserves to make payments, use leverage on rehabs, get foot on door to then grow LOC’s, non traditional lender may not care about seasoning of fundscons: lower entry amount is likely, if personally guaranteed your utilization rate can hurt credit, traditional lenders will need seasoning on funds if transferred from loc into main acct

Won't qualify for traditional mortgage so needs to be a private mortgage.  

@Christian SantillanAs mentioned offer more money.Do you have an attorney assisting?

But then she went on to tell me that doing a traditional 203(b) loan, HUD may choose to offer up to $5,000 toward a repair escrow.

The danger I see here is listing the property as a  traditional sale and having it end up short, which is definitely info you want before listing. 

(1) This isn't "traditional arbitrage" - Arbitrage is where you lease then sub-lease a dedicated unit.