Since then I've found some local banks that are pretty investor friendly as well as some private lenders I work with.

The 'foreclosure' was on a conventional loan so the 7 year rule seems to apply.Anyone in my situation or something similar been able to do buy and holds without those traditional bank options available?

More likely we would have had higher holding costs for holding it while it was on the market and then under contract until it closed.My portion of the profit when split with my partner = $12,406.50Lease OptionPurchase price $72,150 (includes closing costs)Rehab $40,353Holding costs $2,184AVR based on appraisal $150,000Option price $159,900 for 5-year optionFinanced $112,500 on a 20 year mortgage at 4.69% (adjusts after 5 years)Bank closing costs $1,992Option fee $6,500Total into the property -$2,320 (each of us got $1,160 after getting the loan)Monthly cash flow $195.06 (97.53 each)If the optionee exercises the option just before it expires then we will get the difference between what we still owe on the property and what we are selling the property for and we will split another $50,258 ($25,129 each).Total profit $64,283 ($32,141.50 each).In summary, we will get paid a little less than 3 times the amount than if we were to just sell it.  

Ive been to several local banks here asking about lines of credit and none of them seem to offer that.

When I wanted to transfer the deed to the LLC , I am told the bank wouldnt take it lightly and call the loan due.

Not sure how you got your credit score but your online credit score isn't necessarily the same score the bank will see. 

I am having issues getting pre-approved through a bank as I only have one year W2 job history and two years self employment history, even though I have 660 credit 10K saved and we'll make around 70 K this year all income combined.

Our partnership agreement is that we both are responsible for the everything, 50/50.The question is, How do we put the title into an LLC, legally so the bank won't be able to call the note?  

A small benefit is separate bank accounts for property... although some people consider that a hassle, and therefore a disadvantage.You may also want to consider a parent LLC (holding company) that owns the child LLCs.

Used an ATM on the side of a local bank.