You can certainly do lease options as an agent, using traditional listing agreements.  

My goal is to buy and hold single family homes (traditional 3 bed 2 bath).

There is almost no way you will find a lender who will do a traditional mortgage for $20 with $80k in repairs needed.

The overall cost was more than a traditional house because the asbestos removal has to be contained and disposed of in a different way.

I'm in that space in between traditional financing and true hard money.

I think that most people's bad experiences with the program stem from not working with a team that knows their way around the program.You're right that appreciation is not guaranteed - but that is true whether you go with a 203k or a traditional purchase.  

After purchase will convert hard lender to private lender with lower interest rate for traditional loan.

@Hans Christian Engholm RavnI'm looking forward to absorbing as much as I can

OPTION 3Offer the seller to have the property listed and sold the traditional way. 

I would pay finding fee if it cannot happen the traditional wholesaling way.