It's the agents way of saying that there is something so screwed up with the house that no institutional lender will lend on it, or the seller is motivated primarily by speed.Regardless, you will want an inspection to look for this screwed up thing and solid estimates for repair cost. 

What percentage of ARV will they lend to?

The investor simply lends funds from their IRA.

Well, I'm not going to give you hype and encourage you to lure you into any program or strategy of acquiring rentals or doing lending.

I have just under 20 years worth of money lending experience. 

I both broker and direct lend as appropriate (licensed mortgage broker, official job title is loan officer, I really don't care what you call me, but Russell here would probably call me a mortgage broker), so I've got no reason to be biased on this subject.If either channel was always the best, the other channel would have gone out of business years ago. 

I've been researching some lending from either private or traditional but I can't decide what is a better route.  

No lender in their right mind will lend with a lien like that in front of them.

They are hands-off, institutional grade real estate investments, and they allow you the option to diversify.

The primary difference is in how you finance the purchase. 1 to 4 units can be financed with conventional mortgage financing, however when you're purchasing five units or greater in a single transaction, typically you will need to use commercial multi family lending companies.