I select the option for applicants to pay for it, think they can even apply on their smartphone then let's you know report is ready to view. 

The pros far outweigh the cons, which include:Safer living & health conditions for tenantsA peace of mind for you as owner & for tenantsWhich can then in turn directly or indirectly, depending on your perspective & outcome, reduce vacany rates

I recently looked into direct mail, and thought if I could do it myself, it would save some money.

Right now we have done a lot of research, but I think we could just use a point in the right direction for us to move forward.

The question being, do I have to have the property under any contract before applying for the hard money loan?

I think your NAR quote is probably right as we weren't developing from 2008 to 2011, but it probably applies more to select markets where there's been less building recently (strict building codes/difficult to develop/geographically constrained) ...

In that scenario, it might be common to owe over 1/2 of the original amount because payments are applied first to interest and then principal.

Is it possible to lend out of my self directed IRA through a NOTE to someone starting a business.

@Brad Chatman - They are on the MLS or you could do a direct mail campaign, depending on the area you may wind wholesalers moving properties if you are paying cash.

I'm especially interested to hear from anyone with experience in New Jersey, in case any state-specific rules apply.