Plus a lot of the small operations leave a lot to be desired when it comes to the bank's tech and things of that nature.

However, in the scenario you described, it appears there will be a first mortgage in front of you, reducing your security/increasing your risk.As an investor, if you are putting in 50% of the cash required to close, you should expect 50% of the profit on sale. 

2) What can I do in the meantime to increase my chances of the bank saying "yes" when the time comes (if different to a US resident)? 

*FAS = FUNDAMENTALLY ALTER the nature of SERVICES providedWhy has no one been able to turn down ESA requests based on the wording of the actual FHA law?

Now, let's say that the property value increases to 140k after the reno, can I then get any capital to work with if I approach the bank for a cash-out refi?  

I believe the property can use some work and renovations as well as an increase in rent.  

If you improve the property by investing, for example $20 per square foot, what would those improvements bring you in increased rents?

Would a plank with an underlayment handle it better (would increase thickness) ?

That can be increased if needed.4.

Now the increase in fixing cost, re-appraisal, the offer (VA loan), and the supply and demand of market suddenly change.