Skip to content
×
Pro Members Get
Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
ANNUAL Save 16%
$32.50 /mo
$390 billed annualy
MONTHLY
$39 /mo
billed monthly
7 day free trial. Cancel anytime
Real Estate Deal Analysis & Advice
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 10 years ago on . Most recent reply

User Stats

873
Posts
350
Votes
Michael Henry
  • Real Estate Consultant
  • Brookfield, WI
350
Votes |
873
Posts

How do I structure a fix & flip (rehab deal) while the owner holds the mortgage?

Michael Henry
  • Real Estate Consultant
  • Brookfield, WI
Posted

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

Account Closed
  • Investor
  • Central Valley, CA
3,729
Votes |
6,037
Posts
Account Closed
  • Investor
  • Central Valley, CA
Replied

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.  

Loading replies...