Proposed Wholesaling Strategy from Newbie

[Romont Johnson]

I have a RE investing idea after watching a family friend lose their home to foreclosure and I'd like to know what the experts think about it.

I'd like to offer homeowners in preforeclosure the opportunity to stay in and possibly repurchase their home. I would offer to purchase the home at the amount that is currently owed to the bank and give the homeowner 3 to 6 months to repurchase the home (well below ARV). If they fail to secure a loan they can rent the home at an agreed upon rate.

Example: Amount owed is 100k with ARV of 200k. Buyer repurchases in 90 days for 130k.

Has this been done before? What are the pros and cons? Are there any pitfalls I should be aware of? Would this type of deal entice cash buyers? Any advice would be greatly appreciated.