Let's get creative - Deal Brainstorming

[Quentin Johnson]

I was approached about getting in on a deal for a condo in Dallas County. The condo had an electrical fire about a year ago and the owner has been making mortgage payments and rent at their new place during that time. They just want to be done with the property but the rehab isn't complete. The condo association has funds for the owner to complete the rehab and the owner has to option to request draws or take the money and control the rehab themselves. 

The problem I'm trying to solve for is coming up with a few offers that the owner can choose from.  

Here are the numbers: 

- 2 bed/3 bath townhome

- $155,000 left on mortgage with $1200/mo payments. 

- $500 HOA fee monthly

- $230,000 Sell price

- The $75,000 spread is the owners equity that is proposed to be amortized over 2 years. $3100 mo

- Assumable VA loan.

- Market rents: $1900-$2100

- Sell Comps: $230,000

Situation: 

I don't have the cash to service the debt while repairs are being done. 

Owners pitch: Owner carries the note until rehab is done. Uses HOA rehab funds. I'm responsible for paying mortgage until he completes rehab. Then I assume loan, and find renters or move in.

Problem: 

Equity payments make it not worth the hassle. No equity left in the deal. No room to save for reserves. 

I have a couple of ideas on how to approach the seller but I want to get your juices flowing and see what other creative ideas ya'll can come up with.