You can also try Pierce Redmond at Security Mortgage Group (http://www.securitymortgagegroup.net/).  

There are so many buyers (aka borrowers) looking to buy investment properties outside of their market but are struggling to secure commercial real estate financing because banks are not interested unless the borrower is in market with the property. 

A hidden asset may be found, but a protected asset is a more secure one.

Having the FTC involved would likely result in the finance company returning correspondence to the neighbor.  

Wanted feedback from the you guys on what's the best way to secure my investment and if any of you have done this what advice can you provide?

YOU are the one who is entitled to the security deposit, as YOU are the one who will have to pay for any damages.

This was super surprising to me, since the loan is way more "secure" for the lender AFAIK.

Either process could work, but if he is securing his interest with a lien on the property you are purchasing, then he should most likely send the money directly to the title company (and have you sign a note and mortgage or deed of trust). 

I cant imagine they dont have clients that use a rotating line, whether personal or secured by real estate, for a reserve.

However, I now have a Duplex under contract in Birmingham and did the final inspection last week and I was looking to secure funding, then my current lender told me that they don't service the State of Alabama. :/ Does anyone know any smaller local or bigger banks that would offer the same type of loans?