Double digit loans of $250-500k can be both cost and qualifying prohibitive.

Get a good understanding of disqualified parties and prohibited transactions.   

If so, you are in very dangerous territory and should definitely STOP all your dealings with this transaction until you consult an attorney and the CA foreclosure consultant laws which specifically prohibits taking advantage of homeowners in foreclosure (in default) against predatory investors. 

The terms “paid advertisement” must appear on each page of any printed advertisement, or “this is a paid advertisement” must be spoken during any verbal story.A Member in good standing who wishes to display or use the RMAI logo (inclusive of certification logos) to indicate that they are an RMAI Member may do so provided that they first execute an agreement with RMAI which: (i) grants the Member a nonexclusive license to affix the RMAI logo to certain promotional material, (ii) reserves the right for RMAI to terminate the nonexclusive license granted in the agreement and to prospectively change the terms and conditions of the Agreement from time to time in RMAI ‘s own sole discretion, (iii) limits the use of the logo to the Member company’s website or other promotional materials, (iv)prohibits the transfer of property rights, trademark, or other intellectual property interests of RMAI to the Member, and (v) prohibits the Member from assigning the right or authority to use the RMAI logo to any other party.A Member shall not use the RMAI logo on company documents and/or letterhead to imply RMAI has approved or endorsed the content contained therein.CANON 5 – REPUTATION OF THE INDUSTRYAn RMAI Member shall always demonstrate its desire to protect the reputation of the industry which shall be revealed through the avoidance of impropriety, including the appearance of impropriety.Commentary:A Member shall not engage in any conduct that materially and adversely reflects on the receivables management industry.A Member should always be cognizant of the industry’s perception to the public.

It also regularly puts out deals at low 65% or less LTV, and high 10%+ skin in the game/co-investment etc.They market under 506B so are prohibited from posting publicly on the Internet and instead function by referrals.

Adding to the difficulties is the PFA/restraining order which probably prohibits contact either way.

There are tons of them operating and even a bunch of case law about them, but not prohibiting them that I am aware of.

Not prohibitive like a "lockout period" you may see with commercial or traditional multifamily loans, just a small feeMore info on factors that go into DCSR rates and Prepayments:DSCR Loans: What Are They And How To Get The Best Termshttps://www.biggerpockets.com/...DSCR Loans: How To Use Pro Strategies To Save More And Make Morehttps://www.biggerpockets.com/...

Ground up build for an ADU is indeed cost prohibitive, but possible. 

It is considered a prohibited transaction.