(both properties cash flow $1,300/month so they are money machines)My other option (not ideal) is to put 20% down come out of pocket about $15k, dump $10k into rehab and be $25k into a house that will appraise at for $80k.

Criagslist is an option, I haven't had great luck here.

Any suggestions or options, Please

This obviously was a huge surprise to us, and we now want to explore other options with other lenders.

In our local market many areas have extremely limited options for rental properties and units priced appropriately are typically filled quickly.

A lot of NNN lease locations were signed decades ago with 10% bumps every 5 years so as long as they keep renewing their options and if their sales are steady both the landlord and tenant will be fine. 

Fixing the home up first, then using a HELOC or refinancing would give more options for your next investment as you will have more capital.

Seller carry is not an option due to the home being in pre foreclosure.

Gustavo, Since house hacking isn't an option, you'll have to put 20-25% down. 

For the refinance you might want to consider options other than hard money.