Private/hard money to supplement capital

[Kathleen DeNault-Ridge]

I'm considering the purchase of a foreclosed commercial property.  The property continues to cash-flow under the management of a court-appointed operator.  The bank's asking price is 65% of appraised value as they want it off their books.  They are also offering financing with reasonable terms.  There's definitely value to add (and to realize) with this property.  

My question: can private money or hard money be used to supplement the capital I have to deploy for the down payment?  I understand the terms are less attractive terms with these lenders, however: the current cash flow will cover all debt service.  I have found a few direct commercial lenders which will do second position loans.  My concerns are the logistics...

Do direct lenders lends on properties under contract or does the property need to be owned?

How is POF handled for the bank financing when the capital is being supplemented by hard money?

Is this a typical use of private/hard money?

Thanks,

Kathleen