Why don't you try the bank you do banking with.. 

Since you'll be bearing the credit risk on this, do you think that the deal would be sound for your borrower and that they would be financially solvent to pay you without defaulting?

The thing to keep in mind, if you expect to cover the costs of doing the upgrades, that typically is "chasing rainbows" unless you bought below value to begin with.Moral of story, if you are planning on living in a property for a long time, renovate to your taste, if you are planning on selling in the next 5 years, be judicious in upgrades.Selling costs money, real estate agents, escrow, title, and concessions and so on.

We didn't do enough of a sensitivity analysis and assumed we would get a 70% LTV on the loan.

You do have to pay the seller the "equity gap".

Here are a few things I'm curious about:How do foreclosure auctions work in NYC?

Consider doing this personally or using an LLC.

Do you have any properties are areas of NC that you specialize in?

If you hear from him again or an attorney, be sure to respond immediately by your own attorney if necessary.Not sure what the laws are in your state, but you want to do whatever you need to to confirm the tenancy has ended (whether that is by abandonment on his part or with proper notification to end a month to month)

I’m glad you brought up the hammer-nail analogy—do you ever feel that, since insurance is the only product you offer, everyone ends up being sold insurance?