If you’re doing the work yourself (or managing the work), what you’re looking for is called a hard money lender. If you have substantial equity in the property, a hard money lender will fund a short term (12–24 months) loan to cover the rehab costs. The interest rate is above market, but that’s ok because it’s commensurate with the risk. If you can’t pay, they take ownership of the property and you lose your equity.
After you’ve established a track record with a hard money lender, they will be willing to fund the purchase and rehab with a hard money loan.
If you don’t have a property with substantial equity, your best bet is to reach out to people who are currently doing rehabs. Bird dog some deals for them and as you get to know them, let them know that you’re interested in partnering. If you’re offering to manage the project, many will gladly bankroll the project and do some sort of profit split with you. Do a couple of deals this way and then you can fund your own small project with the profits.
You can find people who are doing rehabs and hard money lenders through local real estate investing groups on facebook – If it’s a closed group. it’s more likely to have the sort of members that you’re looking for. You can also chase down the local “we buy houses” bandit sign folks – sometimes they’re wholesalers, but as often as not, I’ve found them to be rehabbers looking for deals. Those guys also advertise a lot on Craigslist, so they’re not hard to find.
The answer behind all of this is that you’ve got to add value – whether is’ bird dogging deals, borrowing from a hard money lender, or running a project. These folks are generally happy to share what they’re doing as long as they see it as adding value to their business.