Lenders typically originate the loans to investor specs using a warehouse line/line of credit (meaning borrowed money the lender is responsible for), then immediately (within 30 days) sell that loan to an investor.

I don't care about someone's color, religion, sexual proclivities, their stance on green energy, political affiliation, etc.I want people that pay rent on time, take care of the property, and communicate when needed.

I can see why the ins company is dancing around and not paying 

I mention this for visibility into the amount borrowed vs the individual's personal assets.Current language in contract: The Guarantors, known as John Smith, of Street Address, Coral Springs, FL 33071 agree to be liable and pay the Borrowed Amount, including principal and interest, in the event of the Debtor’s default.

After about 2 months of waiting (and paying mortgage), I finally rented it out for $1000!

I am not familiar with who you are working with but always recommend vetting any company deeply before signing and paying -- those companies tend to have a lot of overhead they need to pay - out of your bottom line.

What's up Jay,Given your situation, here are a few strategies you could consider to secure the rehab budget while respecting the seller's desire to maintain a first-position lien:Home Equity Loan or HELOC:If you own your primary residence or another property, consider tapping into its equity through a Home Equity Loan or Home Equity Line of Credit (HELOC).

And this works great, when it works, but as soon as the place goes vacant, or rents drop, or a major repair is needed, you still need to pay your debts, so the risks to your cash flow are increased.

Keep in mind this is not land surveying, to determine property lines and easements.Wishing you the best of luck with this project. 

To me, this is using security deposit to pay for repairs DURING a lease (because the tenants aren't moving any time soon).