Although they definitely  form my experience do a very good job on due diligence on the promoter ( borrower) I personally  provided a full FBI background check full credit etc etc.. and usally when you do that that weeds out most HML borrowers.

How do you avoid giving 20% down payment on a non-occupant borrower / investor?

Generally a lender won't finance the sale of ORE.First issue is amounts received above the book value go to the prior owner, that means making a loan and then disbursing loan proceeds to the foreclosed upon borrower, won't happen, IMO.If the bank is beyond this issue with the borrower, they don't lend on properties that they got taking the risk of getting the same property back and going through the same pain again.

AU folks were borrowing against their run up in equity in AU and now they had nothing to show for it..

Lenders don't want you borrowing as an owner-occupant and then never intending to live there.

Normally I fund a flip one of two ways:Purchase the property using a HML, and rehab using my own funds,OR,Purchase the property and borrow the rehab funds all in one loan from my HM lender.Obviously using my own funds on the rehab is ideal, saving me 20% on the rehab, but I find myself lately with more than one project going and can afford to use loaned money, reserving my own cash for the inevitable emergency, or in the case these days, for another opportunity.When I fund the project 100% on a HM loan, I'm usually under 65% ARV for the total loan, and at 15-20% financing.

I have been looking at properties from 20-50k and have 11k capital but can borrow from my 401k need be.

There is no update to be had...it's an urban legend that you can get a list of borrowers that are 30,60,90 days late without getting an actual credit report, that you would not be privy to, and anyone selling that information to you for the purpose you propose, would be violating at best, the covenants of their agreement with the data furnisher and at worst, a possible crime.

HI Jon, the seller credit can only be used for non reoccurring and reoccurring closing costs and cannot be used to offset the down payment of 5% down so the borrower has to bring in their own money either documented from their own funds or by gift.

And all that with no risk of borrowing money.. they get paid for time and a service.