If so, offer additional collateral.

Underwriting is unique and risks are different to a seller than to a cash lender and the foreclosure aspects as to securing collateral is different as installment contracts are terminated, cash loans are a secured interest that is indemnified by sale.

@Mark Creason  I hear you.. but I would submit the experience level of your average commercial borrower and the average BP borrower who is trying to buy low value assets will be vastly different.. if your commercial borrower did not get a request to pay for those items then they would probably be skeptical.Like all the unsolicited crap we.. get I have played with a few of them for fun.you send one e mail back and they say you are approved for 5 million  LOL.. no one does that as we know... but there are inexperienced folks that just don't really know better and they want desperately to be RE investor and they get sucked in.I just close a loan with Lendinghome on a Dallas flip.. my first loan with someone other than my commercial bank in 20 years.. and they asked for I think 150 or 200 up front for a processing fee but they did their own evaluation on the collateral .. and of course I could check them out very easily they are in SF.Its the dreamers that really get taken on these scams.. and in your world its the guy who has no money bad credit but somehow tied up some big project that goes shopping for big money.. they will get sucked into sending bigger due diligence fees and never getting funding. 

The local hard money lender I am with structures my investment as a loan to their lending entity (unsecured), but then has an underlying property where my source of funds went to that serve as collateral for the loan if the hard money lending company doesn't pay me.  

Is this property cross collateralized with other properties the seller owns?

To sum up my take on it:A 15% cap rate with SFRs is something you do whatever it takes to get done.Borrow, cross-collateralize, whatever.You would control the entire neighborhood, and it will gentrify as you make improvements.

They will discover any mortgage against the same property you're using as collateral when they do a title search. 

All the collateral is intact. 

There are some ways around the Acts, by not directly listing the dwelling as the collateral on the loan, but you already have a relationship with an RMLO.

Unsecured would be fine, no collateral?