They must be very low odds because insurance companies are in the business of making money, not paying out maximums.

Buy the house and loan her the money. 

I've never had to use hard money before, so I am not sure what type of conditions are reasonable.

The property will be strictly for investment purposes, not a primary residence.I’ve been looking into two potential financing options:Hard Money Lenders (HML) – I’m drawn to this option for its speed in closing, but I know the rates can be higher.DSCR Loans – This seems like a great option for long-term rentals, but I’m unsure if it’s the right fit for my auction property since it might need some rehabbing.I’m also considering purchasing through a land trust or an LLC to add a layer of protection and privacy.So, my questions are:What’s the best way to approach financing for auction properties?

I took no money from the cash flow (when there was any) and I never made a late payment to the bank.This fall, nearly 12 years after the bank gave me that house, and over 15 years after I knocked on that door - after evictions, vacancies, insurance claims, and never taking a dime out of it - I sold that house and placed all of the proceeds in a 1031 exchange.

I suggest you enter private money goldmine in search botton at top right of the screen and read the previous posts....here is one that gives good perspective as well as a link to legitimate private lenders.http://www.biggerpockets.com/forums/92/topics/1488...

Liquidity is important if this is money you plan to put to work in the near term. 

How do you become a broker for hard money lending? 

You need a firm estimate for the remainder of the work as your funds are limited (like most people who don't have an endless amount of money). 

Engaging does not make you money.