I wouldn't do any work until closed. Anything could happen with title, probate, etc to delay or prevent closing. We once had to wait 4 months to close bc of a probate situation, due to notice of creditors that wasn't filed.
My last probate didn't close at all so please don't take the risk. Just make sure your contractors are lined up or possibly get more subs to make things go faster? Or pay contractor a bonus for completing on schedule.
I agree with everyone else, don't do it. An agreement to get paid back if it doesn't close will only protect you if you go to court, and if they would even have the funds to pay you for it. Too easy for something to go wrong. Spend the time lining up contractors, pricing out material, doing all the due diligence you can on the rehab.
Another factor to consider is if you aren't the owner you could be looked at as an unlicensed contractor doing work. You also won't have your home owners insurance coverage in place to cover your risk. Too much liability for such a small reward its not worth it.
Good Luck, Aaron
I would advise against doing this for a multitude of reasons and if the seller runs this by their lawyer there is no way is will fly. Too much liability for the sellers in this scenario.
Omg no. Weigh how much to lose over how much you have to gain.
The road to hell is paved with good intentions. Though I can understand why you want to do the work before the weather and holiday season sets in, those types of deals are fraught with problems. Better to wait and be sure. It's one of those types of deals that turn into a can of worms if you aren't careful.
Originally posted by @Mike B. :
@Joseph M. Yes. 9 squares, torch down rubber roof over the existing (no removal needed in this case). It’s a row home in south philly. They all do this. Definitely cheap vs shingles!
Nice ! Best of luck with the deal .
My wife is a lender. They do rehab loans prior to closing. They will loan up to the new appraised value once finished. You have to use a licensed contractor. I am not sure if they do this for income properties, or if its for single family only.
From a Liability Standpoint, it would be better to use Licensed & Insured contractors to do any work at the property before you own it (especially the roof work). You can require that they name both the owner and yourself as Additional Insureds. That way, if there is damage to the property or someone gets injured their coverage protects everyone. They should have Liability and Workers Comp.