How to buy property that's in the middle of rehab

[Toby Khan]

Hey guys,

I am needing some advice on how to purchase a property from seller that has completed the rehab work but completed half way. 

Backstory: Seller took on the project while ago but his contractors were only able to rehab (lack of motivation and no project manager to oversee it) half way. It is 4 buildings of 4 plex 16 units all together. 1.5 building is rehabbed. Bank doesn't want to get involved as they mentioned the contractors will have the 1st lien on the property and banks usually want to be the 1st. It was also brought to my attention that cash out refi AFTER construction will be easy solution. Contractors have up to 6 months to file if they aren't paid. I have asked for the contract between seller and contractor to find out if there are any termination clause. Numbers are amazing on this deal hence trying to figure out how to get this one. Seller is bleeding money and has no money left to rehab the rest-he is making interest only payments to his lenders.

I will very much appreciate if fellow investors have gone through something similar and how to close it.

Thanks in advance!