Lending Property Owner Funds for Renovation, Then Split Profits

[Manuel Angeles]

Hello,

I have homeowner looking to sell his home.

He wants me to loan funds to renovate the home, then we split the net profits over his asking price 50-50.

Has anyone here done a deal like this?

What is a good way to structure this deal?
I will provide the general contractor.
I have a private lender to provide a 2nd TD for the renovation.
Then I can record a 3rd TD as a shared appreciation mortgage to split the net profits.

Existing 1st mortgage balance ~$300,000
Needs ~$200,000 in renovation  - to be provided on a 2nd TD
     Total new existing debt: $500,000 (between 1st and 2nd)

Current Estimated Value $770,000
ARV $1,100,000

3rd TD shared appreciation mortgage will dictate a splitting of Net Profit on top of the $770,000 estimated value.