I know that I could close this deal using a double closing with a transactional funding lender but of course I'd like to minimize my fees.

I don’t think you will have any issues renting the condo for that amount and Palm Harbor is still a desirable place to live.  

We don't want to tie up our ability to gets loans since we're trying to build our portfolio.So, I'm looking for advice on ways to fund this project.

I then stumbled upon a local bank, met, they said they knew the building and the history of it, and would advance purchase + rehab funds to get it all fixed up and rented out.

Also if the lender goes under and pulls funding will I be able to get the funds to finish. 

Yard/lot..is this a desirable lot or a not so good lot?

I find the stories interesting as I try and see how I could use their experience and lessons learned to my benefit.My latest read is Ray Dalio's book who is the founder of Bridgewater (Very - Very successful Hedge Fund - That I frankly never heard of - Shocking but True)In the book Ray does a great job of breaking down is career, struggles and lessons learned in the first half and then spends time on the "Principles" he wants to share. 

While there are plenty of hard money lenders to fund the purchase and rehab, I am not finding many lenders who will refi in the $40k-$60k ARV range.

AND would you consider using another funding source or strategy besides tradition bank?

All,As you can probably guess, I am looking to close my first investment, but don't have proof of funds nor liquidity to put down an earnest money payment.