I have an idea about flipping a house that I've not heard of before. Has anyone on BP had experience in making a binding agreement with a current owner to renovate their home, then sell it and split the profit with them? (Shout out to @Aaron K. for letting me know it's possible!!) I'd love to hear any experiences along these lines.
I've thought of this too, not deeply, but decided it's too risky to explore. What if it doesn't sell in a year, then what? What if the owner changes his/ her mind? You'd have to be in a position to file a lien and wait for your investment back. Not my cup of tea.
What happens if the seller decides they really like their new kitchen and decide not to sell? In most states it's virtually impossible to force someone to sell their home so the best you could do is put a lien on the house. You might get your money eventually but what if they don't sell the house for 20 years?
Why not just buy the property yourself, do the reno, and keep 100% of the profits and eliminate the risks? If you don't have the down payment money ask the seller about seller financing, possibly at interest only with a balloon payment?
Thanks @Jeannette C for the reality check!! I admit that after posting the question some of those sorts of doubts began cropping up. I began to think that if the homeowner has no problem defaulting with the bank (which she doesn't) she'd probably find it even easier to take that path with me. It's a home with great bones and I was a bit blinded by the desire to make it beautiful, haha. But better to wait for a clean deal ... and thanks again for your input.
Thanks @Ben Zimmerman for the suggestion to see if the homeowner will consider financing. I like your thoughts about interest only as well. The main thing (as I more clearly realize now) is to make sure I own the home before improving it! Thanks again :)