Seller finance for Flip (which strategy to use)

[Kyle Z.]

HI BP Community 

I need help on structuring this deal! I'll try my best to keep this brief.

 Im trying to buy a property to flip.  I have enough to rehab it but not enough to buy it. The seller has done some investing and was using the house as a rental so I don't think they need the money immediately.  I would like to suggest some type of seller financing but I am not sure which strategy to use.  Does anyone have any suggestions on how I should structure this? Subject to, wraparound? I want to make sure I protect myself and the seller throughout the process.  If anyone knows a good resource where I can research this please let me know. 

Here is the deal specifics if your interested. 

I sent out hand written yellow letters a got a call... it actually works people!

ARV:210-220

Rehab costs: 50k 

Seller said he is looking for 150k. Obviously there is some negotiating that needs to happen here. Im thinking of offering 115 and let him work me up to 120-125.  

Thank you!

[Steve Hodgdon]

Last 2 deals were a twist on this. Seller and flipper became partners. Seller contributes property, buyer/flipper contributes work and rehab costs. Revenue share is negotiable. Flipper gets TIC interest for whatever percentage. Revenue share above benchmarks for each.

Example:

Property negotiated purchase price = $130,000. Included $20k "guaranteed profit" as basis was $110k

Flipper contribution T&M = $60,000. 

Seller deeds 1/3 interest to flipper.

Property sold at $220k net of closing costs and realtor commission.

$30k above the combined $190k split 50/50. Each side got $15k. 

Was a skinny deal. Property values softened in Crown Point IN.  Took 6 months end to end.