(Your loan was for a flip, and presumably for a business purpose, which means the San Francisco Federal Reserve bank rate also plays into this.

Banks will not refinance if I have bad credit.

Some tenants go directly to my bank and deposit their rent directly into my account. 

When the local market started really heating up, the banks dumped as many as possible.

I did so with the intentions of negotiating a short sale with the bank, as there was an existing mortgage on the property.

It's possible with a longer time on market, they may be open to a lower price.2) being sold by owner - may be more opportunity here. price may be over/under market value.3) foreclosure - bank is motivated to sell. may be willing to sell under value especially in a slow area.based on this, it seems like best bet would be to pursue houses sold by owner, foreclosures, and listings that have been on market for a while. there also is a whole other approach of finding motivated sellers - drive bys, bandit signs, etc. 

Most local banks will quote you high 5% rates, with 5 years balloon and 20 years amortization (depending on the property age and location).Agency debt is more competitive but more often then not the loan balance need to be over $1million.

for banks to take short sales the property has to be listed on MLS as well for a period of time.

You can email invoice that has the link to pay online or auto-draft customer's bank (free) or credit card (3%-4% fee).

Or keep the 1st property and use as collateral for a 2nd bigger property if I can find a bank who will work with me.