Since banks are not friendly to this kind of property, how would you go about financing the repairs.

Typically, at least at my bank, they are going to want to see you put the cash in anyway, regardless of the seller hold back, so in this instance the 250k would just be a second mortgage, the bank would still be in first position on the loan, and still want you to put in 375k...Again, this is all depending on the bank so not every bank is the same. 

@Paul DeSilvaWhich bank did you use to get the refi?

How should I present this deal to a bank, hard money lender, or private lender?

Probably not a bad idea to run the next hypothetical deal by your bank and see in their eyes, which property would allow for the most leverage to be created for the next deal.Great problem to have, 2 good deals.

In NYC, you're banking on a lot of appreciation.

There are ways to appeal if they don't count a unit, like referencing mid-1950 water records, but I wouldn't bank on that as a buyer. 

Your backup financing plan when the bank gets a note from LA saying their borrower has died?

My background into RE started when I began working as a commercial credit underwriter for a bank.

My thought is if I buy it outright and I get a renter, wouldn't I just refi. from a bank  and get all my money back for my HELOC.