I just don't trust that the process is fair, based on historic performance.

I admit I should have performed an in person inspection but I wasn’t expecting someone to tell lies. 

@Joe Miller this is the general performance of our market"homes under $350,000 sold in an average of 13 days.

The typical time to rent is eight weeks.How has the "Permanent" tenant pool performed for us?

We are hoping to find suggestions for where to look for tapes of non-performing notes with the goal of practicing due diligence, researching, and making offers.

My understanding of loans and financing is pretty limited.The latter scenario you describe of financing the purchase and rehab and then performing a cash-out refinance is quite frequently practiced.Often, an investor will get a loan for the purchase and rehab of the subject property, and then (after seasoning) cash-out refinance using a traditional bank loan.

Then, just let the current tenant out of the lease (i would keep the deposit if they failed to stay the full term) and then sign a new lease with the new tenant and perform all income/background checks as-if they were applying for the unit.

I'm still doing this manually, which is motivating me to find a way to automate the task :)

@Brent Coombs, @Matthew Brill, I was performing my analysis for after I move out.

When the reinspection is performed, be as gracious and polite as possible and always thank the inspector for his/her time.And finally, does your unit fall under rent control?