Not sure this is a chicken or egg first problem, rather a chicken and egg problem, where you go after both at the same time.

Im pretty sure option 3 is illegal here in Texas because on your sellers disclosure, page 3 item #6 you would have to lie on the form..."

I'm looking for a reason to get rid of them and lying about income on an application is a reason to evict.  

The answer still lies within you and your needs

It's kind of a chicken/egg situation.  

So I understand what private lending is. I'm just having a hard time pulling the trigger. Here's what I have. I have a deal that I like. Acquisition is 100k needs about 50k, ARV is 225k on low end. (I like to be conse...

So, let me summarize for anyone viewing this later (some of this is from the above notes and some of this is from discussions with my tax advisor):  (1) It is best to get a contract when using a service provider; worst case, get a quote that include TAX ID, business name and business address (2) Always get a W9 when using a service provider; my advisor told me that you can probably get away without obtaining a W9 from a national provider like Home Depot, Sears Home, etc, but technically the IRS expects you to get the W9; the burden of proof lies with you to prove you did not need to send a 1099, so in the case of Home Depot, etc, it is highly unlikely the IRS would fine you for not sending a 1099.(3) Using the TAX ID and business name provided on the W9 or quote, perform "TIN Verification" to verify that the business name matches the Tax ID; this can be done for $1 using a web site called www.1099online.com - or use any service you like to do this(4) There is no need to issue a 1099 to a corporation or LLC;  You are allowed to send 1099s to corps and LLCs, but those organizations are allowed to toss them out(5) Whenever more than $600 is paid to a sole proprietor (i.e. a company that is not a corp or LLC) then the IRS requires that you issue a 1099 to that sole proprietor.  

If she LIED TO THE SELLER, what are the odds she has LIED TO YOU?

Okay so there's none lying around anywhere.

Whatever you decide to do, don't lie on the loan application or mislead.