Guidance on structuring a deal
Hi Everyone,
Im a newbie to BP and need some guidance on a potential oppty in NJ.
ARV of property is approx $140k. Prop needs no more then $20k in repairs. Property is owned free and clear by the owner.
Problem is the owner thinks the property is worth $160 - 180k, but is willing to take $140k for it :-).
I let him know that would obviously not work for me, I could offer $60k......he is not willing to go for that but is open to creatively working something out. The owner is disabled, wants out asap, and needs approx $40k to move.
I was wondering if a deal could be structured in a manner in which I can give him approx $40k, and then I get the first $40k in profit and then he either keeps profit above and beyond or we split profit above and beyond. For example.
- Owner gets $40k up front to move.
- I invest another $20k to rehab.
- Property sells for $140k
- After commission, and other expenses there is $125k net.
- I recover my total investment of $60k plus my profit of $40k. Owner gets the remaining $25k.
OR
- I recover my total investment of $60k and we split the profit. Owner gets the remaining $32.5k and I get $32.5k
Is something like this possible? If so how?
Thank you!!!