All Forum Posts by: Jimmy H.

BP community,

I am currently working on a deal which the owner is a lot more interested in keeping the property (instead of selling as-is), and JV with me to rehab it and then split the profits after sale. A realistic ARV is at $500K - $525K or more, and rehab costs to get to that ARV is in the range of 75K-100K. I've already proposed to:

1.)  Buy it as-is for 325K so he'll be done with it and not having to worry about all the repairs and sale and the funds and risks associated, but he is most interested in partnering up and split the profit

2.)  For the option to profit split, I've proposed to have him owner-finance to me at the same 325K and take back a note for the deed as collateral, no interests and payments for 6 months while it is going under renovations and resale, and then profit split after

3.) His desire now is to keep the property without selling or transferring title to me and just JV with me to get it rehabbed and sell for profit splits.

I think he is steadfast in doing this deal according to No. 3 above.  Assuming that the numbers are agreeable and all contingencies (financially) are accounted for, what are the downsides of not having title to the property while doing the rehab?  Obviously a mechanical lien, or something similar, will be filed to protect my interest .... but I would like to know from the BP community if there are other things that I will need to consider in order for this to be mutually beneficial.

Your problems are nice problems to have actually, glad it turned out well.

What would you do if you have competition there that will pay the guy a little bit more?

Great job, congrats.  That gotta be one of the more unusual ones I've heard.

When I have the money I don't have the time; when I have the time I don't have the money.  Funny how that works for most people ... 

Thanks @Asma A. will do.

@Asma A.  Many investors here build their rental portfolio, and sometimes they buy from fellow investors.  I myself don't have a rental here but it is in my plans down the road in the not so far distance.  All in all Houston is competitive but also a healthy rental market.

Welcome Asma.  Plenty of investors here in Houston will be able to help with a rental, you shouldn't have too much problem with rentals here.

I don't know if it is really soft or not, but I am not about to participate in some ridiculous bidding frenzy and that's why I've passed on a few "deals" in sheep clothing.

@Lana Chen  I was going to say something similar but @Doug McLeod beat me to it.