We have federal and state (cali) bank examiners here on BP, what has been put out about banks is not totally correct.
DL, I stopped reading half way through as you continued on making an assumption.
Loan seasoning has to do with the market value, plus hard costs of improvements within a market term. Most folks here can't define "market value", but if the definition is met as to market exposure, time on market, no seller concessions, etc. what you paid for a property IS the market value, there is no guru junk of buying under market value. But there are distressed sales. Your MV is relative over a period of time as markets change.
You can increase values by making improvements.
All banks have federal and state restrictions, there is no finding a bank that doesn't have to follow adopted written loan requirements or prudent lending practices.
Small loans have nothing to do with the amount so much as the cost of servicing the loan over the term. Servicing costs are based on amounts and generally run about a quarter or three eights of a point, they may be higher. The interest rate must be high enough to turn the required yield and cover costs of messing with it. If a minimum loan is 50K, as set, they may be saying that servicing runs about $250 a year per loan. If the loan were 25K, it would cost one point. Now you have another issue, the targeted yield to be earned, they either have to charge more or yield less. Are there any usury laws that are applicable, some states have usury laws on residential properties regardless of it being owner occupied or not.
They also have collateral issues with "junk houses" frankly, banks can take a bath from foreclosures on some 20K house, who would buy it? Answer...it won't be a retail buyer getting an 80 or 90% loan, it will be to a cash buying investor who will do their best to buy it at 12K! Saying that minimum loan amounts also reflect loan losses, cheaper properties have higher costs to secure and sell than can be regained. Costs vs amounts at risk.
Back to seasoning, to establish a new market value you really need a new market cycle, time has to pass to justify not calling your purchase price the true market value. As I mentioned, improvements may significantly influence market value. Buy a 25K property, put 40K in it, you may hit a different pricing level and market area, it could be worth 80K. In such an instance the appraiser will need to explain the market and assess value with both being addressed along with the cost of improvements. Then, a bank may consider the refi under new conditions. Without significant changes, having only some repairs and lipstick, you'll probably be stuck within your original market conditions.
Another issue is your local market, if you're in a small rural town where most inventory is lower priced homes, in order for the bank to meet public benefit requirements, they will need to lend on that inventory. Market cycles can be very slow in such areas, prices may not significantly change in years, much less months. This too influences seasoning required.
From an accounting and book value point of view an asset is valued at cost or market, which ever is less within 12 months, after 12 months it moves to its market value. This is with any non-liquid asset not just real estate. There you'll find the seasoning requirements adopted by banks. If there are active markets and changes to a property a bank may consider 6 months, but they really need to justify that thinking too
Banks sell the use of money, that is their product. They are in sales as much as any other business. They will blow smoke up the tail of a decent borrower who will come in and do more business, making them think they are really special customers. Sometimes small concessions are made or, the bank may even lead a customer they are doing something special for them simply from a marketing aspect. There are compensating factors, if a deal makes sense and doesn't violate law or regulation a board may approve a certain loan or a lending arrangement with a customer.
So, it is not realistic starting off to say you won't be under a more standardized seasoning requirement. After ten years and a few hundred deals, a bank may look at you differently, but even after years of having a banking relationship in larger markets you'll need to be a very big fish in that pond for exceptions. Regulators don't like special treatment, banking is about serving the public and community not special pockets of a local economy.
I suggest you set your business plan along conventional lines of thought in compliance with the norm, not exceptions to the norm. That may mean avoiding cheap properties in favor of more bankable properties. It really depends on your area and market. But, you can't go by claims other investors make as to what they do or how great of a customer they are. Banks are much like other financial industry sales, everyone is the best customer until you need something out of the norm or when you have a claim or when your broker calls about you loans against the box of your portfolio falling short. There are no special borrowers, we all have different levels of advantages but no one commands what ever they want. :)