Structured Seller Finance Sale: Deal or No Deal?

[Howard C]

Hi all,

I'm new to the forum so I appreciate the kind welcome. I am currently in talks with an owner regarding a structured seller finance deal where the owner will agree to give me the rights to repair and resell his property and essentially serve as the property manager from a maintenance perspective, whereby I will be receive all the rents and also be responsible for the private mortgage that he will provide me. There is no bank mortgage as he had previously paid it off. The deed will not transfer so technically I don't own the building but have equitable rights to it, similar to an installment land contract. He also wants 50K as a down payment or security deposit in order to agree to the seller financed deal. I am OK with this because I know I can flip this property, after the repair is done, and net 200K.

I have several concerns though. If I don't own the building then what happens if the owner changes his mind and decides to sell it to somebody else. How will our agreement hold up even though it will be recorded? Can he still sell the deed to somebody else?

From a tax perspective If I end up spending 50K on the building, would I still be able to write off the capital repairs and take the depreciation of the building even if I'm not the official owner?

Is there anything else that I am missing or should be concerned about? Please help me make the decision to see if this is a deal worth moving forward on. Any advice would be greatly appreciated.