I never really considered it because I try to be kind and polite to everyone, but I believe the house we are under contract on right now may have been a similar scenario. 

Is there  any BP members out there flipping in this kind of market and is it profitableGary

@Jackson Tate  My favorite contractor for that kind of work has retired to full-time ministry. 

I have some options with business lines of credit as well, but before doing this I wanted to check on why more traditional loans are being discouraged in this case (and if this is common).

Of course, this STR business can be a 24/7 kind of thing the way I run it. 

While I am new and probably not the best person to offer proper real estate investing advice at this point, I can tell you that one of the common themes I hear from talking to many successful investors echoes what @Jay Helms said above.

Short Story: Refinanced 5 single family units into a 24 unit complex.Back Story: Purchased my primary house(105K) thru auction with a very friendly but very real loan thru my parents(70K), I was originally looking at 30k houses and this one didn't sell at auction and kind of fell into my lap.

He tells me this is a common "takedown" for this type of sale.  

That is very kind. 

This is a very common and popular way to get started investing and it's highly encouraged.It's known as "house hacking" around here on the forums.