Should I look at local banks or will a larger bank have a go at this? 

Each state's tax jurisdiction has its own eviction rules.

I typically see the disbursement around the 10-12th of the month, with it be direct deposited into my bank.

How can I improve my credit enough so the banks feel comfortable about giving me a loan.

I would think the devil is in the details of the other terms, but how about:$260k cash or,$263k owner finance with 30 year amortization, 5% interest and 5 year term or,$265k with 30% down and 70% bank finance. 

I've heard some instances where the City allows the homeowner to get away with a sprinkler in only the new unit, but I don't think you can bank on that.Drawings/Permits - The City will require the new unit to be permitted, and may require a full set of drawings and plans.

I then have them with a small bank in their portfolio. 

It's definitely a city that should continue to see appreciation as investors and developers come in and put their money to work.I wouldn't do any land-banking there if you don't have patient capital though.But if the properties you're analyzing are cash flowing now then I would definitely say pull the trigger.

Beyond that, you should be able to find a lender who will work with you, make some calls, visit local and regional banks and credit unions.

Also, any recommendations on investor friendly realtors, banks, property mgt, plumbers, ect.....send 'em over!