I would suggest ( if you haven’t done so already) that you move forward with confidence that you’ve done the proper amount of due diligence and that this is a solid deal.Don’t procrastinate, sometimes we can analyze over and over again and the only thing we’ve wasted is time.
Execute your plan intelligently and stay in top of all aspects of the deal. Ensure that the contractors complete the job with quality and minimize cost overruns because obviously that cuts into your profits.
Look to do some of the work yourself. For example, tiling is not that difficult and,if anything,maybe you can work with the contractor on the rental unit’s renovations and take that experience and do your home’s renovations yourself.
Your deal sounds great and I look forward to hearing about the success you’ve had with this one and the many more to come.
Hard money lenders don't typically lend on owner-occupied properties.
It sounds like your looking for someone to take a second lien position AND essentially finance the property at a 100% LTV when combined with the first mortgage. That's going to be a tough sell.
You might have better luck looking into FHA loan programs that don't require 20% down. There's even a FHA loan (203K) that can help with the rehab costs. Or perhaps even approaching your landlord about owner financing.
If you want the investor to put up the 20% and then you try to qualify for hard money? How do you split the equity. A hard money lender would lend you 80% LTV and your investor and you can form an LLC etc. This would not be a conventional loan. Hard money lenders loan based on Equity, LTV and put less weight on all the other stuff. Dont oversell them on the big rainbows, they want the brass tacks. Showing you have thought out some of those details is good. Just look out for points and interest. If the deal can not support a hard money lender then it might not be that good of a deal. To you and me it always seems like its a good deal but these guys dont always see it that way.
I would look at an FHA 203K loan -its a purchase loan and rehab money. You need 3.5% down, you will have PMI. The soonest best case scenario is most likely to refi in 6 months more like a year though.