I am a Realtor in the Atlanta area and showed a house to my buyer (who is looking for owner occupancy) that a rehabber had just completed and listed. At the showing, my buyer and I actually met the rehabber who happened to be at the house and invited my buyer and I to check out (2) upcoming flips (Flip A & Flip B) that that the rehabber has purchased, one of which my buyer is interested potentially pursuing (Flip B).
Work was just beginning one of the (2) properties (Flip A) that the flipper had. He told us that the proceeds of the sale of the listed property will fund (Flip A). It sounded like once Flip A was sold, then the proceeds from that could be used on Flip B (which was the one that my buyer liked) My buyer is interested in working hand in hand with the rehabber for his new home. My question is, what are the nuts and bolts of how to make this deal work? My buyer is also looking to move sooner than it sounds like the flipper can get to Flip B.
We asked the flipper the price point that he wanted to sell and he did give a range.
How does this affect my buyer's financing? Is he going to have to get a construction loan?
What are the provisions in the contract to help protect my buyer along the way during the rehab?
I am also checking with my broker but need to find out how to make this work with the buyer. Would this be similar to handling new construction? How is the purchase and sale contract written up? Would the purchase price be based on the after repair value and any changes to scope addressed in Amendments?
Any help would be appreciated! Thanks in advance.