I am not in favor of limiting bank’s abilities to create money in the least.

Which tends to limit your buyer pool.  

My question though, is how do these investors "value" the lien and set a limit on how high they are willing to bid?

There's no loss of use and the inconvenience is extremely minor.

But, when investing with two people, it is better to do that via limited liability entity with an operating agreement so that it clearly is written what happens when someone wants out and stuff. 2) Looks Like your LLC is pretty straightforward, so you can actually do it yourself or via lease zoom, and it can always be revised once you have few properties and get more complicated with other members.

The credit limit is based on the equity in the property. 

If you close a credit card with no balance, all you're accomplishing is lowering your borrowing power by whatever the credit limit was.

My personal attorney told me it will be too expensive to go after a bank to make them liable, and to just take a few thousand dollar loss; and so did a few other attorneys.

I think the main issue you are going to find is that there is limited inventory there, just like everywhere else.

Including your own rent of $2200 ($26,500 a year) that would be close to a combined $30k loss for the year.3.