You become the bank.

The new deal is a foreclosure, that I tried to buy from the deceased owner's family before it went to foreclosure, and so I'm buying from a bank at a higher cost probably

She was super fortunate that she was able to sell before the bank took it.

The only solution I can think of is opening a joint bank account, placing our investment money there.

I would also use the DSCR as the reasoning...the bank won't finance the deal if there is not a 1.25% variance and based on current income we are too far off.  

This creates an issues as no bank will give me a loan to purchase the property in its current state.

In short, goals:1) pay off $25k credit cards balance2) get some reserves around $10-15k(for materials) to finish renovation primary3) if anything left, maybe get some cash for down payment for another rental property So I am trying to choose between Cash Out refi vs HELOCI found two local banks that offer HELOCS on investment property. 70%LTV prime+2%(2.25%), got to pay $500-1500 closing fees.Same banks offer cash out refi for rental properties: 75%LTV, 5.5-6% 30 year fixed, 3000-4500 closing feesSeems like, if I go refi I can pull out around $83k ($105k(new loan) - $18k(current mortgage) - $4k(closing fee)=$83k $83k - $25k(credit cards) - $15k(to finish rehab) = $43k (for next investment).I am still researching and shopping around for other options, but refi seems to be a better option for right now. 

You would look for a construction bridge loan.Consider approaching a community banks that knows the market.

Have the seller provide bank statements showing monthly deposits matching the amount he said each tenant has been paying.

@Joseph Shaggs i would let the bank know ahead of time.