Can I get a loan strictly for rehab cost?

[Lonniel Ingram]

Hello BP and thanks in advance for any help you can provide.

I may have the opportunity to take control of a SFR property in Detroit using a lease agreement. The owner is highly motivated to not deal with the property; however, they still have a mortgage on the property. I am offering to take control of the property, pay for the rehab (approx. $10-15K to get rent ready) and I will cover taxes, insurance...the normal expenses. The owner will continue to solely pay the mortgage for the first 12 months, from 13-24th month I will pay 50% of mortgage. After 24 months I will either assume 100% of mortgage cost or have to exercise my option and purchase the property for remaining mortgage balance. Do lenders finance only the rehab cost of a property when their is still a lien on the property?

[Charlie Fitzgerald]

The titled owner of he property would have to take out the loan.  You and that person could form a partnership, (speak to a RE Attorney to structure this properly please) add you to the title and take out a small loan in both of your names through the partnership, in 2nd position behind the 1st, using a private lender/hard money lender  in your area.  Or, as has been suggested, you could cash flow the rehab costs in some other manner.