Creative minds needed - how should I structure this deal?

[Cheyenne Davis]

Here's the situation...

Seller is an investor who has run out of money and can't rehab a house he bought. There's a decent spread in the deal and we were going to buy it, fix it and flip it. However, our hard money lender got cold feet and won't fund it. In hindsight, I don't completely blame him, as IF something went south the deal may be a little tight.

The seller is open to partnering up and I fund the rehab, then split the profits or deeding it over to us if we pay him a little bit up front. His underlying loan is a hard money loan though, so I don't like the idea of transferring title and taking subject to, even if it's just going into a land trust that we own.

I'm trying to figure out a way to protect our investment capital on the rehab and then be able to resell the finished product for a nice profit. 

My initial thought on the safest way to structure it was to keep the property in the sellers name, attach a lien to the property, get a POA and written agreement so we can sell if he changes his mind or disappears, then rehab and resell. The glaring problem with that idea would be if the seller defaults on other loans or has any kind of financial trouble from the time we start the rehab to the time we resell, another lien could pop up and we would have a problem. We would have to foreclose and payoff the mortgage in order to wipe out that new lien.

Any of the creative real estate experts on here have any ideas? There should be money to made on this deal if I can figure out how to structure it properly and protect my interest.