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Updated over 10 years ago on . Most recent reply

How do I structure a fix & flip (rehab deal) while the owner holds the mortgage?
I have a deal in Milwaukee, WI where I can partner with the Seller to rehab his home and keep the proceeds over a dollar amount. The owner has a 1st Mortgage; a good ARV is there and the numbers work. What I'm wondering is how do I protect myself (My Money) during the rehab and afterward while the house is on the market?
Should I do a lease option and language within the option that protects me?
or
Should I take title to the property (somehow)?
or
Other suggestions...
Most Popular Reply
While I usually think wraps are a bad idea, that is what I would do here. It's short term and not keeping the loan open very long. I'd have the seller finance the purchase price with a promissory note secured by a mortgage, wrapping the existing lien, with a balloon payment to be paid off on resale. That way I'd have deed during the rehab, and the seller gets paid off upon resale.