You should view your risks from the standpoint of a bank. 

The houses have a retail market value of approx 55-65k.I have offered them up to 45k which is my best offer with a bank financing scenario and they are uninterested.  

I don't even remove my listing from online until I have a signed lease, and their funds have cleared my bank account.

- If banks and majority of hard money lenders wont provide initial draw until after work starts how are you financing rehab work on properties post closing?

I've been considering Texas.I understand that networking with lenders, real estate agents, property managers, and local banks is a must in order to get started.

The key is to work with someone who can come up with a strategic plan to target the correct banks and lenders based on our specific situation and goals instead throwing applications at a wall and hoping for the best.

Further, many are using shorter term, 5 year balloon, bank debt. 

I can see the growth with all the new banks opening up.

We are leaning toward shopping for a mortgage from a bank. 

In the case of the big banks, i could see how they might not get the POC filed in time, which screws over the borrower since they can't include that debt in the plan.In your case, you might have to wait it out.