In this scenario the seller has no recourse to get the property back if you fail to make payments on his loan.  

The old way of using agents has been out dated for a long time however most agents and companies fail to see this.

That being said, I also took the online course because I failed the class exam.

I might have a family member willing to do a short term loan, or I might look into Lending Club/Prosper, but if all else fails I can cover the difference with credit card convenience checks. 

Currently I'm looking into a 50000k heloc after a failed attempt at a cash out refinance.

What if the investment fails?

I am an investor in the estate of Texas and to me this is one of the best places to buy and hold and flip.Many investors will fail in this business due to not having different options to offload the properties if not sold (We call it a parachute), we actually shaped our business to rent most of the properties we flip and if we sell them is a bonus.

If you work at it hard enough and get around people who know what their doing it will be very hard to fail!

Like a @Brian Burke for example who is a foreclosure expert in your market.. then there probably is not the kind of money in it your thinking there is.picking up the pieces of a failed major rehab can be all sorts of problems.. at least the foreclosure will wipe out material men liens in CA. 

The worst part about holdovers is the waiting period if you fail to provide a timely, or sufficient notice.