So this is why this is challenging, typically in these instances when you're also the operator, typically you may get 10 to 20% of the profit after giving a preferred return to the investorthis is why you are better off getting a loan and getting 80-90% financing and they include 100% renovation costs 

I prefer situations with multiple paths to a profitable outcome.

Hundred and $50,000 over two years for $1.1 million investment is not a great investment for an investor. typically, in a deal like this, the investor would get at least 80% of the profits. just giving you my two cents as an investor

Profits aren't somehow ridiculously high, but our average cash on cash return is >23% across the portfolio.  

I plan to rehab the house and flip it, but I am concerned that the square footage of the unpermitted garage will not be included in the appraised value and hence my sale price will be lower affecting my flip profit significantly.

The profitability of a HomeVestors franchise can certainly vary based on a number of factors.What I can tell you is that we have franchisees who've achieved significant success, and like any business, some individuals find it's just not the right fit for them.

Also, has anyone experienced condos being profitable outside of house hacking.

So, give them money to move.Bought for $157,100.38 ****** ARV$245,000.005 bed 3 bath – Phoenix AZThese are the numbers from the HUD statementBought for $157,100.38 ****ARV$245,000.00Existing Loan Amt Payoff $118,145.37*Subject To$118,145.37****Closing Costs From HUDTitle$1,045.00Escrow$1,400.00County Taxes$538.38Recording Fee$120.00Cash to seller$10,000.00Misc other charges$525.00Total Amount Due $$13,628.38***Arrears To Bring Account DueTotal Number of Missed Payments:11Total Payment Amount$10,095.47Unpaid Late Charges$146.84Additional Amounts:Foreclosure Fee/Cost$354.19Unpaid Advance Bal$1,101.75Total Amount Due $$11,698.25***FHA Loan Mod 2nd$11,582.44***My Out of Pocket$36,909.07***Total Cost Basis of Purchase$155,054.44ARV (After Repair Value)$245,000.00Repairs Post Purchase$ 5,000.00 +/-Unrealized Profit$84,945.56***Equity (ARV minus Subject To payoff)$126,854.63***I strongly recommend having 3 months reserves as follows:Monthly Mortgage$917.77(Taxes included)Electric Monthly$362.21Water & Sewer Monthly$102.80HOA – None$0Reserves3 months mortgage payments @ $917.77 per month = $2,753.313 months Electric payments @ $362.21 per month = $1,086.633 months Water payments @ $102.80 per month = $ 308.40 Minimum Reserves Total $4,148.34Then I turned around and sold it to someone in CA on a Lease Option for $265,000 getting $20,000 down on a nonrefundable Option fee, and rent of $1,900 a month.

If you are flipping with any regularity, you need to keep some properties along the way and turn them in to BRRRRs rather than flips for two reasons;-You'll need the depreciation, which can increase your profits by 30% or more. 

I estimate total construction costs will be around $1.3M–$1.4M.His initial idea is for me to cover the construction costs, and then we split the profit once the project is sold.How would you recommend structuring this deal?