So I found a bank, which I wouldn’t use again, and got pre-qualified.

I've also gotten in house appraisals from some of the local banks, Union Bank and Trust and Cattle Bank here in Nebraska when I was shopping around. 

Construction loan through community bank, and then refinanced via a non-recourse small-balance Fannie Mae loan (10 year term/30 year am/3 year IO).

A small unsecured credit line from the bank is crucial for me .

Once your in then you do what's needed in order to refinance with a bank for better terms and rates. 

Our LLC has a small business bank account: so, just pay them an hourly rate from the bank account?

The deals we have done before are conventional way through realtor, banks and title company. 

This ended in 2012.Condo conversion is possible, but if this property is in the Capitol Hill historic district, you may fail at the attempt, and the process with them could take several years.

Why would someone privately loan a stranger they do not know a loan at below what a bank would loan that same stranger.

I'm also hitting the 2% rule with $800 rent and feel I have room to raise it as I am on the lower end in the area.Since I bought my first condo with cash I was able to leverage that equity with a HELOC (5/3 Bank), they appraised my property at $58k and gave me $37,500 (65% LTV).