Honestly, their loan programs are too good to be true!

For example, Mike has a house he wants to sell and he has a $150,000 loan on it.

I would think of this problem differently: I might encourage them to explore ADUs... this would give them an additional stream of income and would likely only require a relatively small chunk of money in their savings (relative to the total cost).If they could partner with someone that has experience building and/or flipping (to qualify for the construction loan), then cash them out with a 30-yr DSCR loan (and use that as the builder's profit), then they could rent the property and enjoy the cash-flow.

We'd like to seek a construction loan to complete the build of our new home - does anyone know if a typical real estate rental business plan would be sufficient to show potential income increase? 

If an investment property you can do a DSCR loan. 

In november of 2022, I loaned private money to them for a term of 12 months.

It has two loans one from 2007 for 744k the other is 150k that was borrowed in November 2022 that has a balloon that burst in 2024 .

Is there a specific reason you are asking about hard money loans for a property that could be stabilized with a DSCR loan?

-mid-term rental property (rented room by room via furnished finder), VA loan, cash flows $500/mo.

I would only explore second-lien positions loans if your current interest rate is in the 3's.