Investor · Tulsa, OK · Member since 2015 · 2 posts · 0 votes
Hello BP Investors,
I am looking for advise on an upscale home that I am analyzing for a fix and flip. The property will have an ARV of $467K and the rehab budget is about $180K due to extensive damage from pets. So, the budget does not fit into a typical hard money or private lenders underwriting requirements of a LTV of 65 - 70% of ARV.
In this case, has anyone ever formed a partnership/ contract with a home owner to improve the property without purchasing the property outright form the owner? In other words, improve the property with the existing owner holding title and sharing a revenue split at sale after the property is improved. My thinking is that I would save money on the closing cost, cost of money and create a better profit margin to share with the existing home owner. Obviously, the caveat would be a strong contract to prevent any disputes during the whole process.
Flipper/Rehabber · Alexandria, VA · Member since 2014 · 461 posts · 262 votes
9y
Sounds like a version of the owner (seller) carrying the note. AKA seller financing. If it's the only way of getting the deal done I say "do it". 50% (or whatever your share is) of something is better than 100% of nothing.