Flip without buying and working with the owner ??

[Leland Dunn]

Hello all, new to the forum. I posted an introduction in a previous  post...

Short story: my wife and I were walking through the Park Hill neighborhood in Denver, CO and noticed a 2 story 80-100 year old house that looked vacant. We inspected through the windows and noticed there was construction that had been halted at some point, probably 2-5 years ago. There is a county PERMIT on the window from 2010 - so by the looks of it this poor old house hasn't been touched for some time. 

The idea we had was what if you were able to contact the current owner and work up a deal to invest to fix up the place, have them sell it, then split the profits. This would require an appraisal before the remodel to subtract from the selling price to decide profit. Obviously, this would require a carefully placed legal contract to provide security for both parties involved. Is there a name for this type of agreement/situation? Our heads were spinning with all the legal and tax issues involved. The seller would not have to pay federal tax if under $250 profit, but we would have to if we actually bought it and flipped it. 

Thoughts for the newbies?? Thanks,

Leland