Offering to pay for rehab in exchange for equity in the home
Hey BiggerPockets,
For markets that are super competitive and where property owners are reluctant to sell their homes, it's challenging to get these properties at a discounted market value. Property owners are familiar with the value in their homes, and often price fixer uppers at a premium given the competitiveness and limited supply of the market. I was thinking about an approach where you don't buy the property itself, but somehow creatively acquire a piece of the equity.
I was wondering if any investor has ever tried to acquire equity in a property that's for sale by offering to pay for rehab expenses of a home, and taking a portion of the sales proceeds? The value for the property owner seller in this scenario is that they often get a premium when their homes are remodeled and looking new from non-investor buyers. This strategy would be to get more equity out of fixing the home and give a small fee to the current property owner as a cooperative benefit.
This idea wasn't fully fleshed out so hoping this becomes more crystallized with more discussion.