The tenant doesn't own anything until the option is exercised and they actually buy the property.Owner financing is the owner acting as the bank with a promissory note with the terms of payment (principal amount, interest rate, number of months).

Don't forget these because some banks won't refi until you have a proper seasoning period. 

You'll want to be sure you know your timeline and talk to a bank about potential refi once the property is rehabbed because you'll want to refi ASAP to get that HML paid off plus they usually only do 6-12 month loans anyway. 

 Mark, thank you for your offer, yes, I'm going to need your help, as soon as I can find professional advice in regards to the financing process; I think my situation is a little more complicated, I'm still evaluating the situation myself, since my visits to local banks were not helpful.

The banks are based here, many investors are based here, and so that lends to Charlotte being ahead of the trend.

With that said, you still have options. 1) Speak with some local banks/credit unions to see how much money you could borrow to purchase a place and what % down payment they require. 

Minimum cash flow targeted generally relates to what the bank (small commercial bank) has for debt service coverage ratio requirements.

You can  ask your bank if you have any option to fix the rate when you withdraw the money from HELOC.

Is it likely....probably not.I negotiated many times with hoa’s in short sales, but they were looking bigger losses if the bank foreclosed....depends on the situation.  

Also others have mentioned this also puts a cloud or something on title because even if you sell the property or transfer it to a new owner, the new owner cannot rent the units until after the allotted time based on the eviction reason.If you can purchase a property at a below market rate and evict the tenant for a few thousand dollars and sustain the cost of holding the property, then yes you're going to have some long term appreciation and potential rental gains.