To keep things running well, think about getting a local company to manage the property, make local friends in the business, keep up with market changes, have a backup plan, make sure you have enough insurance, follow the local rules for renting out property, and keep some money aside for surprises.

If you do cash out refinance it would allow to only get to 75% LTV around the high 7s with some points, they would still require to be 1st position.

What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.?

For cash flow in the area STR's are a great strategy that my business partner and I have found to cash flow well.

I have a Facebook page for business where I show the projects that we are doing.

That's not true in all cities, effectively putting you out of business if the city doesn't allow non-hosted stays. 

Another lender who is also an investor, says its really not allowed in our area but she knows it happens.

The fact of the matter is that banks do not want to be in the property management business. 

At the auction I was able to talk to a couple other wholesalers and ask some questions and get some business cards and After the auction her and her husband invited me to lunch and I was able to sit down and talk with them and build a really good connection.

A lease option requires the buyer to occupy the property (which won't work for most investors) or to sublease (which may not be allowed by the seller and may be too complicated and risky for the investor).