My experience with hard money lenders is that they want to have actual collateral. What would be the hard money lender's collateral in your scenario?
I like your thinking though. Depending on the amount your looking for could you obtain a personal loan from a bank for a short time? Or from a website like prosper or lending cloud?
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@Greg K. I think the key point is that you're saying ARV of $1.2M IF a condo conversion is allowed. I don't think any HML would use that value, they would use existing 2 family comps.
But call around to local lenders and see what they think. 12 days is a tight turn around period. Hopefully they're aren't restrictions on buying from a family member and involving a short sale.
Good luck and hope it works out.
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