Aside from having to put 10-20% down to secure the loan, what can I expect to encounter when dealing with hard money lenders in terms of interest rates, points, getting the funds from them to pay contractors/buy supplies, etc.

The seller would qualify for installment method of reporting capital gains.

Has anyone ever used this methods rather than a cash purchase before?

Remember the easiest way to think of the value on your policy is that percentage method.

They countered with wanting back the entire security deposit because they're not convinced the dryer issue was their kid's fault.That's a lot to unpack, and was typed fast so I apologize for grammar.

They have responsibilities (e.g. wife/husband, kids, mortgage payments) and taking that dive into action represents putting their security at risk.

Is there a way to legally require a larger security deposit?

I would do 2nd mortgage with the interest as high as allowed by your state to secure your investment and the balance of the promised return should be in your JV agreement in the LLC.

You could then use that $95k to secure financing for another $300k in property. 

if anybody knows people who are involved with buying and selling non performing and performing notes please list there names by replying to my post, thank yousome other strategies that i've came up with to find notes for sale are researching institutional buyers and sellers for mortgages back securities