Fix & Flip turned Fix and Lease/Option

[Sheryl Griffin]

Hi All,

I have a house that is a fix and flip, but the Contractor's original estimate came in too low, and we’ve exhausted our rehab budget. Now the comps have come down and the spread is tight, so unless a contractor buys it or someone with outright cash and sweat equity, we must sell as is. At this point our only solutions are these:

1) Put a contractor on title, sell the house when rehab is complete, I get what I owe out of it, and contractor gets everything else.

2) Rent-to-Own, we Re-fi the loan to get out from under the Hard Money Loan currently on it, contractor/buyer moves into house on a Lease/Option and finishes the project while living in it.

Here’s my questions for BP:

• What’s the best way (verbiage) to advertise for this scenario?
• On a Lease/Option, should I charge full amount of rent and what's recommended for a NROC (Non-refundable Option consideration) in this situation?
• Should contractor get a break on rent since they’re working on the house? (the house is pretty rough on the inside with no kitchen, but has 3 finished bedrooms and 1 bath, running water and electricity)

Thanks in advance!