I think this idea is way outside of the realm of the concerns for the average investor.

Besides market listings like Loopnet, Costar, etc and foreclosures, what's best method to find commercial properties for sale?

I'd definitely not send him checks, end of next month he needs a license to service OO consumer debt, if he's not a broker he's probably not a servicer would be my guess, but requiring pre dated checks is an issue as well.You'll need evidence of his requirements, not phone calls but you can record calls if you comply with state law concerning recorded conversations, you need to see an attorney for that, a prosecutor may assist you.

The absolute best method is through networking.

If you are concerned with him outright defrauding you, then you shouldn't be doing business with him.

That return improves when you buy below market value and that takes care of some of your concern about a market downturn.

I have worked some comps and it appears it could rent for $1200-1300 comfortably, but my main concern is that it has a $267 HOA attached to it that would eat directly from my profit.

The SAFE Act basically states that any financing method or system devised that may provide any rent credit toward the purchase of a residence or that facilitates the sale of any covered property will be covered under the law.

If it was me, I would set up a seperate free email account, like mail.com, email him via the craigslist link, with my phone and first name and ask him to call me about the oppourtunityHe is probably just as concerned about craigslist spammers as you are, and doesn't put his name and phone in the ad

I probably could have taken some of the other paths you suggested, but I considered my current contacts and their investing goals, what the hard money lenders I've talked to look for in a property, and the value of my time securing an alternative method, and decided to pass.