Refinancing out a private lender

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I've got a potential deal in the works. I could be purchasing for $30k with $20k in rehab. I've got a private lender (family member) who is willing to lend me an interest only loan on the entire amount.

This will be my primary residence for a few years and the plan is to refinance him out after the rehab is complete.

Does there need to be any formal lending paperwork/leins filed against the property for the refi to go through without them treating it as a cash-out refi?

How difficult would it be to get the refi done? Good credit and plenty of equity in the deal, but I'd like to refinance him out of it with as little out of pocket on my end as possible.

Thoughts?