Hard Money Question about Owner Occupied Property

[Stephanie Ford]

Hello all. I’m trying to get clarification on using a hard money loan on an owner occupied property( my parents). They have been living at this property for about ten yrs paying rent to my step-dad’s “friend” and never made an agreement to have an option to buy. 

The land has two properties on it, one they are living in and the other is just vacant. I’m just getting into RE so this pissed me off once I realized what was going on. However, my parents credit isn’t too good and I don’t think a traditional loan would be an option.

Here are the details below:

ARV: 230K

PP:90-100K possible maybe lower

Repairs: 20-30K

If they were to get a hard money loan and then take out a loan on their house to pay back the HML, would that work?