You will need the cash to build it and I doubt banks will be favorable with lending terms.

This will be a question for your bank.

@Mike Terry Yes, it is conservative, but that's because it's the operating expense margin that most of the banks I work with for my clients use in their underwriting.

Bank loan How did you add value to the deal?

Start by talking to a bank/loan officer to see how much you can borrow. 

I don't have experience with the Detroit Land Bank, but generally land banks are pretty reliable, but...they are low money buys (from $1 to $1,000) that require you to show proof of funds for the rehab.

But might help others avoid this pitfall…when a mortgage is transferred between banks, I’m learning they don’t record a lien release with the county. 

Hi Jaycee, I did barrow from a local bank, this is my third property with them.

In response to your original question, closing agents should handle private loans just like a bank loan. 

As far as the sale of a property with a mortgage on it, that all gets sorted out at close. ie, you bring your money, the bank gets what they have coming, the realtor gets what they have coming (if there's one involved) and the seller gets the rest.